XRP Price Forecast: Extreme Oversold Levels Hint at $1.55 Retest

XRP (XRP) is one of today’s notable winners with a 20% single-day gain thus far in the session as the token made a strong comeback after hitting the $1.15 area.

Once again, our bearish target for XRP yesterday was hit later in the session. It was surprising to see the token dipping this much in just 12 hours, but that’s how things are rolling these days.

Trading volumes have more than doubled in the past 24 hours to $15 billion. This figure accounts for 16% of the asset’s circulating market cap, reflecting a spike in market activity.

XRP ETF Assets Get Slashed in Half

Investors have kept buying XRP exchange-traded funds (ETFs) despite its downfall. Data from SoSoValue shows that $23 million was poured into these vehicles during the first three days of the week.

XRP Daily ETF Inflows – Source: SoSoValue

That said, these funds also took their biggest single-day withdrawal recently on January 29, when investors pulled out $93 million.

Total assets now held in these ETFs have declined to $832 million for a 50% drop in just a month, as a result of the token’s strong drop.

RSI Hits Lowest Level on Record

This is the updated daily chart we shared yesterday, and we can see how strong this single-day candle currently is. It is almost turning into a Marubozu/Engulfing candle that would provide early confirmation of a reversal.

XRP/USD Daily Chart (Binance) – Source: TradingView

In this higher time frame, the Relative Strength Index (RSI) hit 17 – an extreme level even for cryptocurrencies.

This is the most oversold the RSI has been on the daily chart from Binance. It is a historical anomaly that should not be overlooked, and today’s reaction seems to confirm that this “black swan” has captured the market’s eye.

The selling pressure seen recently is commonly the result of cascade liquidations, not organic supply and demand dynamics.

Liquidations hit their second-highest level in 30 days on February 4, which was probably the reason why we saw this kind of price action.

Truth be told, today’s strong bounce could be the result of some profit-taking from bears, who need to buy XRP to close up their shorts.

However, it could also be the result of massive buying pressure coming from whales who think the selling spree has gone a little bit too far.

A Retest of $1.55 is the Make-Or-Break Moment for XRP

Moving to the 4-hour chart, we are as close as we can get to getting a buy signal from our system. As I have emphasized previously, these signals pop up whenever a “decisional” candle shows.

XRP/USD 4H Chart (Binance) – Source: TradingView

It tracks specific candle patterns that are accompanied by strong volumes within a specific trend. Right now, we are not yet on an uptrend, but a move above the 21-period exponential moving average (EMA) in the 4-hour chart could confirm a retest of the $1.55 structural level.

This is the key area to watch within the current bearish price structure, as a break above it would mean that the downtrend has been fully reversed.