XRP Price Forecast: Recovery Odds Rise as XRP Recaptures Key Level

XRP (XRP) has gone up by nearly 8% in the past 7 days after bouncing strongly off the $1.03 level.

Trading volumes jumped to more decent levels as a result, spiking by nearly 62% in the past 24 hours alone to $1.8 billion.

XRP is now trading above $1.15, meaning that it recaptured a former area of support that it recently lost as a result of June’s initial selling spree.

This is an encouraging move from a technical standpoint as it means that buying pressure is rising. In addition, further price increases could ultimately trigger a short squeeze that could push XRP to higher levels in the near term.

That said, last month positive net inflows to XRP-linked ETFs dropped from $132 million in May to $59 million in June, meaning a 55% decline. This shows that investors’ interest in XRP at these heavily depressed price levels has actually weakened rather than increasing.

Daily Active Users Spiked as XRP Hit a New Cycle Low

Right now, the market is sending mixed signals concerning XRP’s future. On the one hand, you have Wall Street investors shunning the token, while, on the other end, you have crypto-native buyers piling into the token.

On-chain data from Santiment confirms this trend, as daily active users within the XRP Ledger spiked to their highest level since February.

Back then, we saw XRP rising from $1.47 to $1.54 at some point, which is currently our bullish target for the token in the near term.

A spike in active users at these latest lows of $1.03 could suggest that whales piled into the token with the expectation that the price will recover. This sends a signal to the market that deep-pocketed players perceive XRP as an undervalued asset.

However, it also increases the odds that this recent move could be a “fakeout” triggered by whale-level volumes and not the result of organic buying.

XRP Bullish and Bearish Case — Is This a Dead Cat Bounce or a True Recovery?

Moving to the daily chart, we can see that XRP found a temporary floor at $1.03 and has now broken above a key area at $1.13 that acted as support in the past.

The Relative Strength Index (RSI) just rose above the signal line, indicating that momentum has shifted from positive to negative. However, we still need to see the oscillator climb above 60 to confirm that this uptrend has the chance to change the trend’s direction.

If the price keeps rising, our baseline scenario for XRP is that it will retest the $1.32 area, which was a former support level that has turned into resistance.

Meanwhile, if this was something more than a mere technical bounce triggered by whale buying, the price could head to the 200-day exponential moving average (EMA), which currently sits at $1.50. This means an upside potential of 33% in the near term.

As for the downside risk, we maintain our bearish target of $0.80 if XRP rejects this move above $1.13 at some point.

We see a short position as the most favorable trade right now if the price drops below $1.13, as the risk-reward ratio for that trade would be quite high if the stop price is set above that mark and the target at $0.80.