XRP Nearing $1.40 Mark, Can It Break Resistance and Surge This Time?

▲ Ripple (XRP) ©Go Da-sol

XRP is setting the stage for a significant breakthrough past $1.40, driven by steady inflows into its spot exchange-traded funds (ETFs) and increasing demand for derivatives.

According to investment media FXStreet on May 20 (local time), XRP tested a short-term support level of $1.35 during trading before rebounding to continue trading above the $1.37 mark. Recently, it faced resistance near $1.50 and pulled back due to macroeconomic uncertainties from rising U.S. inflation and geopolitical tensions in the Middle East, but it appears to be recovering again. Market participants are focusing on the Federal Reserve's policy direction ahead of the release of the minutes from the Fed's April monetary policy meeting scheduled for today.

The continuous inflow of funds from institutional investors has recently sent positive signals for XRP's future outlook. As of Tuesday, inflows into XRP spot ETFs increased from $750,000 the previous day to $1.48 million. According to financial data platform SoSoValue, XRP spot ETFs have recorded net inflows for four consecutive days, with cumulative inflows reaching $1.39 billion and average total net assets at $1.12 billion.

Investor sentiment in the retail market is also reviving. Perpetual futures open interest increased from $2.83 billion the previous day to $2.93 billion as of Wednesday, demonstrating active participation in the derivatives market. This sustained increase in open interest is expected to be a driving force pushing XRP's price above the key resistance level of $1.40.

However, looking at technical indicators, the short-term upside may be limited. Currently, XRP's price is trading below its 50-day Exponential Moving Average (EMA) of $1.41, its 100-day EMA of $1.48, and its 200-day EMA of $1.69, indicating an overall bearish trend. Additionally, the Relative Strength Index (RSI) on the daily chart remains in the low 40s, and the Moving Average Convergence Divergence (MACD) histogram also shows a decline in negative territory, suggesting persistent downward pressure.

Consequently, for XRP to enter a full-fledged upward trajectory, it must decisively break through the initial resistance level of $1.40 and the 50-day EMA at $1.41. If it surpasses this zone, the door could open for further upside towards the 100-day EMA at $1.48 and ultimately the 200-day EMA at $1.69. Conversely, on the downside, $1.35 acts as a short-term support level, and if this defense line breaks, there is a risk of a decline to the key demand zone of $1.30.

*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.*