XRP Price News: Can XRP Bounce Back From $2.1?

XRP (XRP) has gone down by 3.5% in the past 24 hours, and trading volumes have surged by 70% as the token continues to break through key supports.

Crypto liquidations in the past 24 hours have spiked to $1 billion again, underscoring the strength of the sell-off.

Bitcoin (BTC) has taken the lion’s share of this amount, with more than $400 million worth of long positions in the top crypto being wiped out of the market in just a day.

The end of the U.S. government shutdown did not seem to do much to improve investors’ sentiment. The Fear and Greed Index currently sits at 15 once again. This is the third time that this market gauge has dropped to this level this year.

Fear and Greed Index – Source: CoinMarketCap

The last time it happened, cryptos started to recover and ultimately made an all-time high. On April 4, the Index sat at 15, BTC traded at $76,000, and XRP sat at $1.79.

On this day, the market touched its lowest point of the year, and started to recover right after. Just three months later, XRP doubled.

So, will history repeat? It may not, but the upside potential if it does could be huge.

Ecosystem Growth Supports Bullish Outlook for XRP

Ripple has been making some interesting progress on the institutional front. Last week, the first pure spot exchange-traded fund (ETF) hit the trading floor in the United States.

The Canary Capital XRP ETF (XRPC) has already brought in $257 million in assets despite the downturn and was the best debut of the year based on its first day volumes.

Moreover, Ripple recently launched its Prime platform, created for institutional investors in the United States to facilitate crypto trading and payments via Ripple USD (RLUSD).

The stablecoin has seen its market cap skyrocket from $50 million a year ago to $1 billion at the time of writing, indicating that adoption is accelerating.

XRP Needs to Break Above the 200-Day EMA

Looking at the daily chart, how could we get confirmation that XRP is ready to make a strong comeback?

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

The token has bounced off the $2.1 level multiple times already. As long as this support holds, there’s hope that this sell-off could be nearing its end.

The price action has formed a falling wedge. What we would like to see is a bullish breakout out of this bearish formation that pushes XRP above the 200-day exponential moving average (EMA).

That would be a good sign that bulls are once again taking over the price action. Based on the latest buy signal that the Fear and Greed Index gave us back in April, if XRP doubles its value, this means that it could rise to $4.2.

Is this going to be a White Christmas for crypto? The odds are stacked against a recovery, but that is usually the best environment to start the next leg up. When everyone is selling.

The Relative Strength Index (RSI) could also help confirm a bullish move if it climbs above the 14-day moving average (EMA) and over the mid-line.

The Federal Reserve said that a rate cut in December is uncertain, but that does not mean it won’t happen. Any changes in the odds could tip the scales in favor of bulls and deliver the results we witnessed earlier this year.