XRP price holds bullish structure ahead of possible breakout
- XRP trades broadly sideways as sentiment remains elevated in the crypto market ahead of a potential pennant pattern breakout.
- XRP records the largest weekly outflow of $37.2 million in history, ending a remarkable 80-week inflow streak.
- XRP struggles to sustain the uptrend, eyeing a potential return above $3.00 amid confluence resistance at $2.25.
Ripple's (XRP) price moves broadly sideways at around $2.33 at the time of writing on Monday, as cryptocurrency prices consolidate following a brief sell-off over the weekend. Sentiment in the crypto market remains relatively high, even as spot volumes are subdued possibly limiting the probability of a return above $3.00. Meanwhile, downside risks toward support at $2.00 linger, with XRP facing a crucial confluence resistance at $2.25.
A slight increase in the derivatives market's Open Interest (OI) suggests that interest is growing among traders despite outflows into XRP-related products surging to $37.2 million.
Exploring the $37.2 million outflow as XRP consolidates
Inflows into digital assets generally increased last week, reaching $3.3 billion, as reported by CoinShares. This surge propelled the year-to-date (YTD) inflow to a record $10.8 billion, led by $2.9 billion into Bitcoin products and $326.2 million in Ethereum-related products.
Intriguingly, XRP posted the largest weekly outflow of $37.2 million, breaking an impressive 80-week inflow streak.
CoinShares did not highlight any reasons why XRP-related products experienced the largest outflows, while most other digital assets, including Solana (SOL), Sui (SUI), Cardano (ADA) and Chainlink (LINK), recorded inflows, as shown in the chart.
Digital asset inflow data | Source: CoinShares
The derivatives market OI's 2% increase over the past 24 hours to $4.74 billion, coupled with an approximately 10% rise in trading volume to $2.97 billion, suggests that trader interest and market participation are up-trending.
The long-to-short ratio of 3.0371 on Binance's XRP/USDT pair leans bullishly, suggesting that traders are betting more on the price increasing than sliding.
However, higher long positions liquidations amounted to $2.6 million compared to $1.43 million over the past 24 hours, cautioning traders to temper their expectations this week.
XRP's derivatives market data | Source: CoinGlass
Can XRP steady uptrend ahead of a potential pennant breakout?
XRP's price faces increasing overhead pressure reflecting changing sentiment in the broader market, as traders adjust positions following a bullish last week and a weekend that leaned slightly bearish.
The international money remittance token declined over 1% on the day after rejection from $2.35, a confluence resistance established by the 4-hour, 50-period Exponential Moving Average (EMA) and the 100-day EMA.
Beyond the 200 EMA at $2.31, the next area of interest for long traders would be around $2.26, which was tested as resistance in late April.
XRP/USD 4-hour chart
On the flip side, traders could look for a break above the confluence resistance at $2.26, which will likely pave the way for confirming the bullish pennant pattern illustrated on the chart.
A break above the pattern's upper trendline would validate the previous uptrend's continuation, potentially setting XRP on a 14.2% projected path to $2.72. This target is determined by measuring the distance between the pennant's widest points and extrapolating above the breakout point. A significant increase in trading volume would accompany such a breakout.
The Moving Average Convergence Divergence (MACD) indicator highlights a buy signal when the blue MACD line crosses above the red signal line. The likely rebound toward and above the mean line could encourage traders to buy XRP, thus increasing the demand for the token and the probability of retesting resistance at $3.00.
Cryptocurrency prices FAQs
Token launches influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.
A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.
Macroeconomic events like the US Federal Reserve’s decision on interest rates influence crypto assets mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.
Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs.
Author
John Isige
FXStreet
John Isige is a seasoned cryptocurrency journalist and markets analyst committed to delivering high-quality, actionable insights tailored to traders, investors, and crypto enthusiasts. He enjoys deep dives into emerging Web3 tren
