Ripple Price Forecast: XRP tests key support as bullish optimism dims
- XRP slides to $2.40 amid sticky bearish sentiment on Tuesday.
- Investors remain unfazed by Ripple’s partnership with Immunefi, which aims to test and strengthen the proposed XRP Ledger Lending Protocol.
- Low retail demand in the derivatives market subdues the odds of XRP’s recovery in the short term.
Ripple (XRP) is trading above $2.40 support at the time of writing on Tuesday, after breaking a three-day recovery streak in the wake of last week’s violent sell-off.
Meanwhile, after experiencing Friday’s dramatic deleveraging, XRP derivatives show signs of stability, which could usher in new opportunities in the coming weeks.
“With excessive leverage purged and structural risks reduced, the market setup now looks far healthier. We view the coming weeks as an opportune window for capital deployment,” K33 Research stated in the latest report.
Ripple and Immunefi collaborate on institutional lending protocol
Ripple announced on Monday that it has partnered with Immunefi, a platform dedicated to blockchain protection and security operations, to test the robustness of its proposed protocol.
The collaboration encompasses a $200,000 Attackthon, aimed at testing and strengthening the XRP Ledger Lending Protocol. Ripple stated that the program will run between October 27 and November 24, calling on security researchers to review the code and uncover vulnerabilities, and earn rewards in RLUSD.
On the other hand, retail interest in XRP has stabilized in the past few days. However, it remains significantly below the level seen during last week’s deleveraging event, which triggered massive liquidations. The XRP futures Open Interest (OI) averages $4.34 billion on Tuesday, after increasing to approximately $9 million on October 7.
Still, a minor uptick from a four-month low of $4.2 billion, observed on Sunday, suggests that XRP has the potential to attract retail demand. An ascending OI trend would indicate that investors are strongly convinced of the token’s ability to sustain recovery.
XRP Open Interest | Source: CoinGlass
Technical outlook: XRP bulls defend key support
The price of XRP has been hammering on the short-term $2.40 support on Tuesday, following a rejection from the previous day’s high around the 200-day Exponential Moving Average (EMA) at $2.63 on the daily chart.
Investors are struggling to see a clear bullish narrative, especially with the Moving Average Convergence Divergence (MACD) indicator upholding a sell signal since Thursday.
The downtrending Relative Strength Index (RSI) at 35 in the same daily time frame indicates that bearish momentum is increasing. It would be an uphill task for bulls to defend the short-term support at $2.40 if the RSI extends its decline into oversold territory.
XRP/USDT daily chart
Key areas of interest include $2.00, which was tested in late June, and $1.61, last tested in early April. On the upside, traders will look out for a break above the 200-day EMA at $2.63 to ascertain the uptrend’s strength for an extended price action toward the $3.00 psychological level.
Ripple FAQs
Ripple is a payments company that specializes in cross-border remittance. The company does this by leveraging blockchain technology. RippleNet is a network used for payments transfer created by Ripple Labs Inc. and is open to financial institutions worldwide. The company also leverages the XRP token.
XRP is the native token of the decentralized blockchain XRPLedger. The token is used by Ripple Labs to facilitate transactions on the XRPLedger, helping financial institutions transfer value in a borderless manner. XRP therefore facilitates trustless and instant payments on the XRPLedger chain, helping financial firms save on the cost of transacting worldwide.
XRPLedger is based on a distributed ledger technology and the blockchain using XRP to power transactions. The ledger is different from other blockchains as it has a built-in inflammatory protocol that helps fight spam and distributed denial-of-service (DDOS) attacks. The XRPL is maintained by a peer-to-peer network known as the global XRP Ledger community.
XRP uses the interledger standard. This is a blockchain protocol that aids payments across different networks. For instance, XRP’s blockchain can connect the ledgers of two or more banks. This effectively removes intermediaries and the need for centralization in the system. XRP acts as the native token of the XRPLedger blockchain engineered by Jed McCaleb, Arthur Britto and David Schwartz.
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