XRP Faces Critical Support Challenge: Will It Rebound from $1.90?

Summary:
XRP is currently trading around the $1.90 mark, exhibiting a 2.35% decline in the past 24 hours. Despite this dip, trading volumes have surged more than 15%, indicating increased market activity. A significant support level is at risk, and market sentiment has turned cautious among traders and investors.

Key Takeaways

XRP's price is currently around $1.90, down 2.35% in the last 24 hours.
Trading volumes have increased by over 15%, reaching $3.31 billion.
$1.90 serves as a crucial support level; a bounce could lead to a price increase, while failure to maintain this level may result in a decline to $1.31.
Bearish sentiment is prevalent among traders, with notable outflows from XRP Exchange-Traded Funds (ETFs).

XRP Faces Critical Support Challenge: Will It Rebound from $1.90?

Current Price Dynamics of XRP

XRP's trading price was recorded at approximately $1.90, marking a decrease of 2.35% in the last 24 hours. Interestingly, trading volume has increased significantly, up by more than 15%, amounting to $3.31 billion. This rise in volume during a price drop typically signifies a greater level of trader engagement, which can reaffirm existing momentum.

XRP Price Dynamics
Source: TradingView

According to AMBCrypto’s technical analysis, XRP is testing a critical support level at $1.90. Historical data suggests that this level has previously led to significant upward movements, occurring more than five times in the past. If XRP can maintain its position above this support, it might see a similar price rebound as before. Conversely, a failure to hold could trigger a sharp decline of about 27%, potentially bringing the price down to the next support level near $1.31 in the near future. Currently, XRP is also trading below the 50-day Exponential Moving Average (EMA), indicating a bearish trend and weak momentum in the short term.

Traders’ Sentiment Analysis

Trader and investor sentiment appears mixed, leaning towards bearish, as per data from the derivatives platform CoinGlass. Notably, in the past day, investors transferred approximately $8.15 million worth of XRP to exchanges, likely in anticipation of a sell-off.

XRP Spot Inflow/Outflow
Source: CoinGlass

Additionally, traders are adopting heavily leveraged positions. The XRP Exchange Liquidation Map indicates that traders face significant risks at $1.869 on the downside, with $24.46 million in long positions, while an over-leveraged area at $1.947 holds $37.85 million in short positions. This data showcases the prevailing bearish mood in the current intraday market.

The inflows into spot XRP Exchange-Traded Funds (ETFs) appear to have halted as market sentiment continues to decline.

XRP ETF Outflows Surge to $54 Million

On January 19, during a period of muted market activity, notable outflows from spot XRP ETFs reached $53.32 million, according to SoSoValue.

Spot XRP ETFs Outflow
Source: SoSoValue

In the context of ETFs, outflows signify capital withdrawals from these investment vehicles and are typically interpreted as a bearish indicator. This trend reflects diminishing interest and confidence in XRP among institutional and Wall Street investors. Notably, this was only the second significant outflow since the launch of these ETFs, which have historically shown resilience with minimal outflows.

Conclusion

As XRP navigates this critical juncture, the market's reactions and sentiment will play a pivotal role in determining its immediate trajectory. Investors and traders should monitor these developments closely, especially given the precarious positions indicated by current trading data.