XRP recovery falters as low demand and risk-off sentiment weigh

Ripple (XRP) is trading above $1.40 at the time of writing on Tuesday amid renewed uncertainty over the war in the Middle East. XRP ended higher on Monday from the weekly open of $1.38, after United States (US) President Donald Trump expressed optimism that talks with Iran are underway.

However, the Strait of Hormuz, a major shipping channel, remains restricted with Iran denying the talks with the US. Moreover, Israel has vowed to keep striking Iran to protect its interests in any ceasefire or deals that may arise.

Sentiment across the crypto market remains weak, as reflected by the Fear & Greed Index, which is holding at 11 in extreme fear territory. The index improved marginally amid Trump’s war optimism, but its impact on risk appetite appears to lag.

XRP struggles for direction as retail and institutional demand cools

Interest in XRP derivatives has taken a backseat, with futures Open Interest (OI) holding around $2.39 billion on Tuesday and Monday. Looking back, the OI had increased to $2.87 billion on March 17, but faded amid persistent risk-off sentiment.

CoinGlass data also shows that retail interest sits significantly below the record $10.94 billion, a level that coincided with XRP hitting $3.66, its current record high in July. If derivatives demand fails to steadily recover, it would mean an uphill battle for XRP’s recovery.

Similarly, demand for XRP spot Exchange-Traded Funds (ETFs) also lagged, with muted activity on Monday. Although XRP recorded inflows of $1.98 million on Friday, the overall sentiment still lags. SoSoValue data shows that there have been only two days of inflows into US-listed ETFs since March 6. Cumulative inflows stand at $1.21 billion, and net assets under management at $1.01 billion.

A CoinShares report on crypto-related capital flows, released on Monday, stated that the Federal Reserve’s (Fed) hawkish stance on interest rate cuts in 2026 continues to weigh on the market, along with uncertainty driven by the Middle East war.

“Digital asset investment products recorded US$230m in inflows last week, marking a notable slowdown compared to prior weeks. While the prevailing view attributes this to the increasingly protracted Iran conflict weighing on sentiment, we believe the more likely cause is the market’s “hawkish pause” interpretation of the US Federal Reserve’s Wednesday meeting,” CoinShare report stated.

Technical outlook: XRP rebound slows amid lagging technicals

XRP hovers above $1.40 amid a broadly bearish outlook, with the price below a long-standing descending trendline. Major moving averages appear to be capping potential rebounds from $1.49. The SuperTrend indicator highlights the dynamic resistance at $1.58, further limiting recovery attempts.

Meanwhile, the Parabolic SAR has flipped below the spot price near $1.36 on the daily chart, tempering downside momentum but not yet establishing a clear uptrend as the Moving Average Convergence Divergence (MACD) indicator fades toward the zero line, pointing to weakening bullish pressure after the recent spike to $1.54.

The Relative Strength Index (RSI) stabilizes at the high 40s, reinforcing a neutral outlook rather than a decisive uptrend. XRP could remain vulnerable to selling pressure if the RSI remains below the 50 midline.

Initial resistance lies at the 50-day Exponential Moving Average (EMA) around $1.49, followed by the recent swing high near $1.54. A break above these levels is required to reopen the path toward the 100-day EMA at $1.67 and later the 200-day EMA at $1.92.

On the downside, immediate support is seen in the $1.38–$1.40 zone, which guards the Parabolic SAR at $1.36. Failure to hold above this supply area could trigger an extended decline toward the lower end of the range at $1.25.

(The technical analysis of this story was written with the help of an AI tool.)