Ripple Price Forecast: XRP flaunts bullish structure amid steady institutional demand
|- XRP poised to extend its recovery toward its record high, backed by positive market sentiment.
- XRP investment products gobbled up $190 million in capital inflows last week, underscoring growing institutional interest.
- The drop in Exchange Reserves to 2.95 billion XRP indicates a decline in selling pressure.
Ripple (XRP) price is edging downward, currently trading at $3.16 on Monday. Despite the minor intraday correction, the international money remittance token has recovered from a 19% decline to the support level at $2.95, tested on Thursday.
Despite the instability experienced last week, attributed to overheated market conditions and potential profit-taking, XRP maintains a bullish structure supported by robust technical indicators and growing interest from both institutional and retail traders.
XRP attracts $190 million capital inflow
XRP is among the altcoins that stood out last week as capital inflow into related investment products grew exponentially. According to a CoinShares report released on Monday, XRP saw inflows totaling $190 million last week, backed by positive market sentiment, particularly surrounding altcoins.
Ethereum (ETH) led the inflows with $1.59 billion, its second-largest week in history. By contrast, Bitcoin (BTC) experienced minor outflows of $175 million, underscoring the shift in market dynamics despite the price of BTC remaining near its record high of $123,218.
“These altcoin inflows may be driven less by broad-based enthusiasm and more by anticipation surrounding potential United States (US) exchange-traded fund (ETF) launches,” the CoinShares report highlighted.
Polymarket believes that there is an 86% that the US Securities & Exchange Commission (SEC) will approve XRP spot ETFs by the end of 2025.
Bloomberg analyst Eric Balchunas recently revised his prediction to 95%, further reinforcing the optimism for the crypto products purchased directly on stock exchanges without the complexity of owning the underlying assets.
Meanwhile, CryptoQuant’s Exchange Reserve metric indicates a notable decline in the number of tokens held on exchanges, particularly on Binance. After peaking at 3 billion XRP, the blue line on the chart below dropped sharply, averaging 2.95 billion XRP by Sunday.
If this decline continues, the supply of XRP on the exchange will continue to shrink, indicating a drop in potential selling pressure. Holders transfer their assets from exchanges, intending to hold longer, which can also be attributed to having confidence in the ecosystem.
XRP Exchange Reserve - Binance chart | Source CryptoQuant
Technical outlook: XRP bullish structure intact
XRP price is currently trading at $3.16 at the time of writing on Monday. The Moving Average Convergence Divergence (MACD) indicator on the 3-day chart affirms the bullish grip, maintaining a buy signal triggered on July 6 when the blue line crossed above the red signal line.
Traders will maintain exposure to XRP or buy the dip if the buy signal holds, backed by the green histogram bars above the zero line.
Key areas of interest would be support at $3.00, which was tested on July 21 and capped price movement in early March. On the upside, a break above the previous all-time high at $3.40 could make XRP attractive to risk-on investors, thus paving the way for an extended recovery to its current record high of $3.66.
XRP/USD 3-day chart
Still, traders should consider tempering their bullish expectations, considering the downtrend in the Relative Strength Index (RSI). Although still in the bullish region at 66, the RSI indicates signs of weakness, suggesting that bullish momentum is fading.
The support tested on Friday at $2.95 would be critical for the resumption of the uptrend if the down leg extends below $3.00. Other key areas of interest to traders are the 50-period Exponential Moving Average (EMA) at $2.42 and the 100-period EMA at $2.08 on the 3-day chart.
Open Interest, funding rate FAQs
Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.
Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.
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