XRP Price Outlook: Will ETF Excitement Propel It Beyond the Key Danger Zone?

XRP has experienced a surge in interest due to the optimism surrounding exchange-traded funds (ETFs), but analysts warn that the price must surpass certain resistance levels to confirm a bullish trend. The latest developments show potential for XRP, especially with institutional backing, yet caution is advised regarding the sustainability of these price increases.

Key Takeaways

Recent on-chain metrics and the introduction of XRP spot ETFs have generated short-term bullish sentiment and price gains.
A significant move past the $2.55 mark is essential to shift the trend towards bullish. The On-Balance Volume (OBV) indicator suggests that buyer strength remains weak.
New SEC-approved regulations by Cboe have allowed institutions to diversify their crypto ETF holdings, including Franklin Templeton's inclusion of Ripple [XRP] in their portfolio.
Franklin Templeton has launched its own spot XRP product, the XRPZ trust, contributing to a notable price spike on November 24.
The $2.05-$2.15 range previously functioned as resistance but is now being retested as a potential demand zone.
Despite the positive short-term movement, XRP's overall longer-term trend remains bearish, with decreasing exchange reserves and ongoing short-selling indicating a possible short-squeeze.

XRP ETF optimism brings bounce, but can the bulls undo the downtrend?

Current Gains Are Not Enough for XRP Bulls to Celebrate

XRP 1-day Chart Source: XRP/USDT on TradingView

The one-day chart reflects a significant imbalance (highlighted in white) from the crash on October 10. Since then, this area has proven be a strong resistance zone. After experiencing heavy selling volume in November, particularly following November 11, XRP reached a new swing low, reinforcing its ongoing downtrend. As it stands, the daily price structure remains bearish.

XRP 4-hour Chart Source: XRP/USDT on TradingView

On the four-hour chart, the internal structure appears bullish. The recent lower high at $2.15 set on November 20 has been surpassed. However, the OBV has not broken above this recent high, indicating weak buying momentum. This is not the first instance in the last three months where XRP has exceeded a local lower high in the four-hour timeframe, as these patterns often coincide with significant impulse price movements. For instance, the rally to $2.55 on November 10 hit a prior high, which, upon being retested, instigated a fresh downward movement.

Thus, XRP bulls should tread carefully. Although a rise to the $2.40-$2.50 range is possible, it may lead to the same downward outcome once more.

Disclaimer: The information provided in this article does not constitute financial, investment, trading, or other advice and reflects only the opinion of the author.