XRP Threatened at $1.40, Will Continuous Spot Fund Inflows Be Its Savior?

▲ XRP/AI generated image ©

As the cryptocurrency market, which recently hit a peak, undergoes a general correction, XRP (Ripple) is also testing the $1.40 support level and facing the risk of further decline. However, despite technical weakness, funds are consistently flowing into spot Exchange Traded Funds (ETFs) and the derivatives market, indicating that investors' medium to long-term confidence remains strong.

According to investment media FXStreet on May 7 (local time), XRP retreated from its weekly high of $1.46 recorded the previous day, falling to around the current short-term support level of $1.40. This downturn mirrors the overall trend of the virtual asset market, as the leading cryptocurrency Bitcoin (BTC) broke its three-month high of $82,850 and is now retesting the $80,000 support level.

Despite the price decline, market participants' buying sentiment remains undeterred. According to SosoValue data, net inflows into US-listed XRP spot ETFs have been increasing daily, reaching $3.87 million on Monday, $11.28 million on Tuesday, and $13.03 million on Wednesday. Consequently, cumulative inflows averaged $1.32 billion, and net assets under management reached $1.11 billion. Additionally, the crypto Fear & Greed Index slightly rose from 46 to 47 the previous day, maintaining a positive investment sentiment.

The derivatives market is also showing a gradual recovery. The open interest in XRP futures increased from $2.59 billion the previous day to $2.61 billion. However, the media pointed out that the current retail investor demand is significantly lower than the peak open interest of $10.94 billion recorded last July when XRP hit an all-time high of $3.66. To establish a medium to long-term bullish outlook, open interest must explosively increase alongside price appreciation.

Technical indicators show a neutral to slightly positive bias in the short term. XRP is currently hovering above its 50-day Exponential Moving Average (EMA) of $1.41, which acts as initial trend support, but remains below its 100-day and 200-day EMAs of $1.50 and $1.74, respectively. The Relative Strength Index (RSI) on the daily chart is balanced around 52, and the Moving Average Convergence Divergence (MACD) histogram has slightly risen above the zero line, suggesting a limited recovery in buying pressure.

Experts have identified the $1.45 region, where previous rallies struggled, as the first resistance level for a future ascent. If this is surpassed, $1.50 and $1.74, which form a long-term downtrend structure, are expected to act as subsequent resistance levels. Conversely, on the downside, the key is whether the short-term support of $1.41 can be defended. A clear breakdown of this range on a daily closing basis could lead to a deeper downturn with weakened technical momentum, experts warned.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*