XRP (CRYPTO: XRP) has pulled back from this week's gains, but analysts believe the recovery structure stays “intact” as long as the coin defends the key support at $1.20.
The Headwinds And Tailwinds
In a note shared with Benzinga, Shawn Young, Chief Analyst at MEXC Research, stated that XRP’s biggest headwind is “weak follow-through” across the broader cryptocurrency market, though he noted that inflows into spot exchange-traded funds are providing support.
The ETFs, including Bitwise XRP ETF (NYSE:XRP) and Canary XRP ETF (NASDAQ:XRPC), have drawn $1.44 billion in cumulative net inflows since launch and seven straight weeks of positive flows, according to SoSo Value.
The analyst viewed progress on the Clarity Act as a key catalyst that could improve “institutional confidence” in XRP.
Key Levels To Watch Out For
XRP surged to $1.28 earlier this week on reports of a U.S.–Iran peace deal, but it pulled back afterward and did not regain momentum following President Donald Trump's formal signing on Wednesday.
Young emphasized that price recovery depends on whether buyers can defend the $1.20 area, stating, “A hold above $1.20 would keep the recovery structure intact.”
He added that XRP bulls need to reclaim the $1.27-$1.30 range; until that recovery occurs, price action appears to be a test for seller exhaustion.
‘Bull And Bear Cases Are Both Pretty Easy To Make’
Joshua Kim, CEO and founder of decentralized crowdfunding platform DonaFi, echoed Young’s observations, identifying ETF inflows, regulatory progress, and Bitcoin (CRYPTO: BTC)-led market strength as the “obvious” catalysts for XRP.
The biggest headwinds, according to Kim, are recurring selling pressure, concerns about XRP entering circulation from escrow releases, and the slow pace at which real-world use typically catches up with market hype.
“XRP remains one of the more interesting large-cap crypto trades because the bull and bear cases are both pretty easy to make right now,” the analyst stated.
Futures Market Sees Enough Action
XRP's derivatives market showed bullish sentiment, with both retail and whale traders on Binance taking aggressive long positions, according to Coinglass data.
Moreover, open interest in XRP futures has surged 12% in a week, indicating high interest in betting on its price moves.
Price Action: At the time of writing, XRP was exchanging hands at $1.17, down 3.35% over the last 24 hours, according to data from Benzinga Pro. The token has lost over 36% of its value year-to-date.
Photo courtesy: Shutterstock
Login to comment