After weeks of significant decline, XRP is beginning to flash signals of a potential turnaround, with several key technical and on-chain metrics suggesting that the severe selling pressure might be nearing exhaustion. Following a nearly 23% drop over the past month, the cryptocurrency has shown its first signs of life, hinting that a more substantial recovery could be on the horizon.
Investor Exhaustion Paves the Way for Rebound
On-chain data points to a growing sentiment of investor fatigue, often a precursor to market bottoms. The Net Unrealized Profit/Loss (NUPL) metric, which tracks overall investor profitability, has fallen to multi-month lows for both short-term and long-term holders. Short-term XRP holders are experiencing losses not seen in a year, with the NUPL dropping to –0.20, a level historically followed by sharp price rebounds of 20% to 74%. Similarly, long-term holder NUPL has hit a six-month low. This widespread capitulation among investors often signifies that the market has purged weak hands, setting the stage for a potential bounce.
Technical Indicators Support a Reversal
Complementing the on-chain signals, key technical indicators also suggest a shift in momentum. The Relative Strength Index (RSI) is displaying a "hidden bullish divergence," where XRP’s price formed a higher low while the RSI recorded a lower low. This pattern typically indicates that despite recent price weakness, the underlying bullish trend remains intact and a cooling-off period might be concluding. Furthermore, several "death crossovers" have completed on the Exponential Moving Average (EMA) charts, with short-term averages dipping below longer-term ones. While seemingly bearish, these crossovers frequently occur near the tail end of a bearish phase, suggesting the correction has largely run its course.
Key Levels to Watch for Confirmation
For XRP to confirm a sustained recovery, specific price levels will be crucial. A daily close above $2.44 would serve as the initial indicator of strengthening momentum. A more definitive move past $2.59, which is close to the 200-day EMA, could then clear the path towards higher targets of $2.82 and potentially $3.10. However, traders should remain cautious; a drop below $2.28 could invalidate this recovery setup, potentially leading to retests of support levels at $2.08 or even $1.77, which might represent a broader cycle bottom.
