XRP has recently seen a notable 30% price rebound, climbing from a yearly low of $1.1 to $1.4. This recovery has sparked debate among analysts and investors regarding its true nature: is it the beginning of a robust V-shaped recovery, or merely a temporary "dead cat bounce" before further declines? Despite the immediate upward movement, a closer examination reveals a mix of bullish signals and significant cautionary indicators, suggesting the altcoin's near-term trajectory remains highly uncertain.
XRP's Rebound: A Closer Look
The recent surge in XRP's price followed a sharp decline, with the rebound displaying characteristics often associated with a V-shaped recovery. This upturn was notably fueled by a strong volume surge, alongside a positive signal from the MACD indicator, which printed a golden cross, signifying a shift in momentum. Furthermore, the initial drop found support at levels retested during the October crash, potentially forming a solid base for further gains. Should this momentum persist, XRP bulls could aim to clear overhead resistance levels at $1.6 and $1.8, translating to potential gains of 10% and 30% respectively.
Lingering Doubts and Market Caution
However, several factors temper the optimism surrounding XRP's recovery. The Relative Strength Index (RSI) remains below average, failing to fully confirm a sustained positive shift. More critically, while whale selling pressure has eased significantly from $33 million to $15 million since January, it has been predominantly negative since July, indicating a persistent underlying selling trend. The most compelling evidence for caution comes from the options market. Sophisticated traders exhibit extreme wariness, with the 25-Delta Risk Reversal showing negative readings, implying a greater demand for puts (hedging against downside) than calls (bullish bets). This sentiment is so pronounced that options traders currently price less than a 6% chance for XRP to reclaim the $2 mark within the current month, strongly hinting that the current relief rally could indeed be a temporary dead cat bounce.
