Ripple (XRP) is supported above $1.40, and trading around $1.47 at the time of writing on Wednesday. The increase, although minor, has erased losses posted the previous day. However, low activity in both the institutional and retail environments may temper XRP’s bullish scope, currently targeting Sunday’s high at $1.67.
XRP retail and institutional demand weakens
Since reaching its record high of $3.66 in July, XRP has struggled to sustain rebounds, leading to volatile price fluctuations amid a weakening retail derivatives market.
The XRP futures Open Interest (OI) stands at $2.45 billion on Wednesday, down from the $2.53 billion recorded on Tuesday. In contrast, the futures OI peaked at $10.94 billion in July, coinciding with the token’s all-time high.
The overextended decline in retail activity mirrors the drawdown in XRP price. As OI fades, traders close positions in droves and refuse to open new ones, leaving XRP vulnerable to market pressures and risk-off sentiment.
XRP spot Exchange-Traded Funds (ETFs) also experienced a steady decline in investor interest, as evidenced by muted activity on Tuesday. According to SoSoValue data, US-listed XRP spot ETFs remained quiet, with no flows, leaving cumulative inflows at $1.23 billion and net assets under management at $1.06 billion.
As interest in related investment products fades, overall risk appetite also diminishes. Weak sentiment dampens XRP’s recovery potential, while increasing the probability of an extended bearish trend.
Technical outlook: XRP steadies above support as sideways trading extends
XRP has remained below the high on Sunday at $1.67, while support around $1.40 holds. Despite the Moving Average Convergence Divergence (MACD) indicator having sustained a buy signal since Saturday, the overall structure remains bearish.
The 50-day Exponential Moving Average (EMA) at $1.71, the 100-day EMA at $1.92 and the 200-day EMA at $2.13 trend lower, limiting the upside. A continued decline below the demand zone at $1.40 may retest last Friday’s low at $1.35.
Meanwhile, the Money Flow Index (MFI), an indicator that tracks the flow of money in and out of XRP, is rising to 53, suggesting steady risk appetite. A higher increase in the MFI would confirm a bullish shift, with XRP likely to break out toward $1.67.
Near-term targets include a break above the psychological hurdle at $1.50 and the next seller concentration at $1.54, which aligns with the February 6 high.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.
The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.