More oversold than during the Corona crash! Is Ripple's rebound imminent? $1 and $1.12 will determine its fate

▲ Ripple (XRP) ©Go Dasol

An analysis suggests that while XRP (Ripple) is holding near $1.08 in a historically oversold zone, a rebound has not yet been confirmed, and its future direction depends on whether the $1 support level or the $1.12 resistance level breaks first.

According to cryptocurrency media outlet Watcher.Guru on August 4 (local time), XRP fell to a two-year low near $1 last month, dropping 72% from its all-time high. The monthly Relative Strength Index (RSI) has fallen lower than during the COVID-19 pandemic in 2020, entering a historically deeply oversold level.

Cryptocurrency analyst CW analyzed that investors betting on a decline are reducing their losses as short positions are liquidated or closed during the recent upward trend. Such a short squeeze (buying pressure that occurs to liquidate or cover short positions) can trigger a short-term surge, but it is difficult for the upward trend to continue if new spot buying does not follow.

Technical burdens also remain. All major moving averages from 7 to 200 days are currently above the current price, with the 200-day moving average formed at approximately $1.36. XRP's historical average August return is 0.43%, the lowest level of the year, and it has closed August with a decline for the past four consecutive years. The XRP spot ETF also recorded '0' net inflows on several trading days in July but maintained a total net asset value of approximately $1 billion.

On the other hand, whale movements indicated accumulation rather than panic selling. Whale wallets moving over 1 million units accounted for the majority of net outflows from exchanges, indicating a trend where large investors are increasing their holdings by taking advantage of price weakness. Long-term holders are noting this whale accumulation and spot ETF demand as potential grounds for a future rebound.

A key catalyst for a rebound in 2026 is the Clarity Act, the U.S. cryptocurrency market structure bill. The Senate has not yet scheduled a vote, and not much time remains until the August recess. The media reported that if this processing window is missed, related legislation could be delayed until as late as 2030. If XRP conclusively closes above $1.12, bullish prospects could strengthen, but if $1 breaks, there is a possibility of retesting extreme oversold levels similar to last month.

*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.*