Ripple Price Forecast: XRP risks deeper losses as mild ETF inflows persist
- XRP drops toward $2.00 support as the broader crypto market wobbles ahead of the Fed's monetary policy decision.
- Low retail interest, with futures Open Interest stabilising at $3.71 billion, may continue to cap rebounds.
- XRP ETFs extend mild ETF inflows, suggesting declining institutional interest.
Ripple (XRP) is grinding lower, trading at $2.06 at the time of writing on Wednesday, reflecting risk-off sentiment across the cryptocurrency market ahead of the Federal Reserve (Fed) monetary policy decision.
If the central bank meets market expectations and cuts the benchmark rate to a range of 3.50%–3.75%, sentiment surrounding XRP and other riskier assets may improve. Lower interest rates often incentivize traders to increase their risk exposure.
Meanwhile, XRP holds above its $2.00 short-term support following a rejection at Tuesday's high of $2.17, as traders brace for volatility likely to follow the Fed's decision.
XRP recovery stalls amid mild ETF inflow
XRP spot Exchange Traded Funds (ETFs) recorded their 17th consecutive day of inflows, with almost $9 million flowing in on Tuesday. The cumulative inflow volume stands at $944 million, with net assets of $945 million. A break above $1 billion may affirm institutional interest in XRP ETFs.
Meanwhile, demand for XRP derivatives has stabilized, with futures Open Interest (OI) standing at $3.71 billion on Wednesday. OI, which represents the notional value of outstanding futures contracts, is significantly below its record high of $10.94 billion reached in July, suggesting that low retail interest in XRP may be suppressing a recovery.
Technical outlook: XRP declines seeking liquidity
XRP is trading at $2.06 at the time of writing on Wednesday, down from the day's open at $2.10. The cross-border money remittance token also sits below the 50-day Exponential Moving Average (EMA) at $2.26, the 100-day EMA at $2.42 and the 200-day EMA at $2.46, which maintain a bearish outlook as they slope lower and cap rebounds.
The Moving Average Convergence Divergence's (MACD) line is hovering near the red signal line on the daily chart and the histogram bars remain relatively flat, suggesting lackluster momentum. With the Relative Strength Index (RSI) at 43.94 (neutral-bearish) and declining, buying interest could be subdued below the 50 midline in the short term.
Still, the descending trend line from XRP's record high of $3.66 limits gains, with resistance seen at $2.57. The rising trend line from April's support at $1.61 underpins a potential bullish bias, offering support near $1.82. A daily close above the 50-day EMA at $2.26 would ease pressure and could open a recovery toward the 100-day EMA at $2.42. Failure to hold rising support would expose the downside. Overall, bears may stay in control until the XRP price reclaims the moving averages as support and momentum improves.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.
The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.
(The technical analysis of this story was written with the help of an AI tool)
추천 기사
