XRP Price Recovers as RSI Exits Oversold Zone: Is a Rally Coming?

XRP price has recently bounced back to the high-timeframe support level of $1.86 as the Relative Strength Index (RSI) moves out of oversold conditions. This situation raises the possibility of a relief rally if crucial volume levels are regained.

Key Takeaways

XRP has recovered to the $1.86 support level, showing signs of early stability.
The RSI exiting oversold territory suggests weakening selling pressure.
If XRP can regain key volume levels, a short-term rally may be on the horizon.
The next significant resistance level to watch is the $2.40 region, indicating potential selling interest.

XRP price RSI oversold conditions hints at rally.

Current XRP Price Trends

XRP price rebounds as RSI exits oversold territory: Rally ahead? - 1
XRPUSDT (4H) Chart, Source: TradingView

XRP's recent price movement mirrors past situations where bearish momentum slowed at important structural support levels. The $1.86 price point has been tested multiple times historically, with each successful defense coinciding with deeply oversold RSI conditions. In those earlier cases, price rebounds led to sharp increases in value, pushing the RSI back towards overbought levels and triggering significant rallies, rather than slow recoveries.

It’s essential to consider this historical perspective. Even though oversold conditions do not guarantee a rally, their occurrence alongside a well-established high-timeframe support zone increases the chances of a rebound. Currently, the RSI has moved out of the oversold territory, indicating that selling pressure may be lessening.

Additionally, XRP Exchange-Traded Fund (ETF) assets have surpassed $1 billion, highlighting a growing interest from institutional investors, which coincides with improving technical conditions for XRP.

What Happens if XRP Reclaims the VAL?

The next important level to watch is the Value Area Low (VAL). This volume-profile level indicates the lower boundary of fair value within the current trading range. If XRP closes above this level on a daily basis, it would indicate that buyers are regaining control, strengthening the bullish outlook.

Should XRP reach this level, the next target could be the $2.40 range, which represents a prior resistance area that has limited rallies in the past. This resistance zone might attract selling interest again, but a move towards it would align with a typical relief rally following oversold conditions.

It's critical to differentiate between a relief rally and an outright trend reversal. At this point, the market is responding to oversold conditions rather than breaking free from a long-term trading range. For XRP to sustain upward movement beyond resistance levels, it will need to display strong bullish momentum along with increased trading volume. Canadian analysts have also projected a rise in XRP adoption within the fintech sector, adding a positive long-term outlook, though this does not eliminate the need for technical validation.

Key short-term price activity around the $1.86 support level remains pivotal. If XRP can maintain this support in closing prices, it would uphold the bullish scenario. Conversely, failing to hold this level could invalidate the oversold rebound thesis and raise the possibility of further declines. However, continuous acceptance above this support level would enhance the chances for higher prices soon.

Anticipated Price Movement Ahead

As long as XRP remains above the $1.86 support and the RSI continues its recovery from oversold levels, a relief rally towards $2.40 appears increasingly feasible. Regaining the Value Area Low with strong trading volume would confirm a bullish continuation, whereas a drop below support would negate this setup.