Ripple (XRP) edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.
A decisive break above the pivotal $1.40 level could ease bearish momentum and open the door to an extended recovery. However, traders should not lose sight of the next support at $1.25, as XRP is not out of the woods yet.
XRP MVRV-Z Score signals a potential bottom
XRP has sustained an overall downtrend amid price fluctuations since its record high of $3.66, reached in July. The token hit a yearly low at $1.12 on February 6 amid extremely oversold conditions. While an immediate recovery propelled XRP to $1.54 on the same day, headwinds continue to cap the upside.
Meanwhile, the MVRV-Z Score, a metric that gauges whether XRP is over or undervalued relative to its fair value, dropped into negative territory in early February, suggesting the token may have bottomed.
Although the duration of the MVRV-Z Score in the negative region varies, historical data show that sustained recoveries often precede such scenarios. For example, in July 2024, when the MVRV-Z Score hit -0.13, XRP surged from $0.45 to $2.91 in December of the same year. Hence, there’s a high probability that the remittance token has bottomed and is poised for an extended recovery, as the MVRV-Z Score remains at -0.13.
Despite the potential bullish outlook highlighted by the MVRV-Z Score, rising exchange reserves paint a conflicting picture that may hinder recovery. According to Glassnode data, the cumulative balance of the cross-border money transfer token increased to approximately 12.99 billion XRP on Thursday, following a brief dip to 12.93 billion XRP on February 8.
The upsurge, although relatively minor, warrants caution, as it increases the amount of XRP available for sale in the open market. Investors transfer their holdings to exchanges amid market volatility, intending to sell and reduce risk exposure.
Technical outlook: Can XRP steady its recovery?
XRP hovers at $1.36 and sits well below the falling 50-day Exponential Moving Average (EMA) at $1.76, the 100-day EMA at $1.97 and the 200-day EMA at $2.16. All three moving averages are sloping downward, reinforcing a bearish setup.
The Moving Average Convergence Divergence (MACD) remains below the signal line and under the zero mark. Meanwhile, the red histogram bars have been contracting, suggesting downside momentum is fading.
Still, the Relative Strength Index (RSI) at 32 (near oversold) signals subdued strength, while the descending trend line from $3.66 (all-time high) limits rebounds, with resistance seen near $2.13, keeping recovery attempts in check.
Although the MACD remains below its signal line, it is poised to cross above it. Such a scenario would prompt traders to increase risk exposure and support a stable recovery toward this week’s open at $1.43. Nevertheless, XRP is not out of the woods and may extend the correction to the October 10 low at $1.25.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.
The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.
(The technical analysis of this story was written with the help of an AI tool.)