XRP (XRP) has retreated back to $1.31 following a strong breakout that confirmed what could be the beginning of a recovery.
This encouraging price action move has occurred ahead of today’s interest rate decision by the U.S. Federal Reserve, which calls for some caution despite its bullish nature.
Odds of a Rate Hike Today Are Low… Watch Out for Surprises
Analysts surveyed by FedWatch expect that the Fed will keep rates unchanged during this meeting, with odds of a rate hike sitting at just 9%.
Any surprises on that front could fully derail the recovery and potentially push XRP below its nearest and most relevant support at $1.26.
Trading volumes are still thin at this point, sitting at $1.8 billion and accounting for 2.2% of the asset’s circulating market cap.
This is the result of the latest wave of bearish sentiment that has impacted the crypto market amid its ongoing correction.
However, we expect that, once the FOMC meeting is in the rearview mirror, the market will have the necessary breathing room to push the price of cryptos back to the levels we saw in late September.
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See all Ripple forecastsNet Inflows to XRP ETFs Dried Up in October
In the meantime, net inflows to exchange-traded funds (ETFs) reflect little interest from Wall Street and retail investors in this token.
This month, investors have only poured $11 million into these vehicles, marking the second consecutive month of a downtrend in this particular metric.
Yesterday, Ripple announced that it got the green light from the Office of the Comptroller of the Currency (OCC) to set up a national bank called the Ripple National Bank Trust.
This could have been the project-specific driver that pushed XRP above $1.33 during yesterday’s session, but it is still too early to tell if this positive news will be greeted with enough excitement to fuel a rally to $1.55 — our short-term bullish target.
XRP Needs to Stay Above $1.30 to Keep the Rally Alive
Turning to the chart, we can see that a W-shaped bullish price action pattern was confirmed after XRP broke past the $1.31 level.
We highlighted in a previous XRP price prediction that this was a pivotal level for the token, as a break above it confirmed a trend reversal.
As long as XRP does not drop below $1.30, a bullish short-term outlook for the token persists, while this latest pullback in the 4-hour time frame creates an interest opportunity for a long position.
Setting the stop-loss below the nearest lower high, a conservative target of $1.38 would result in a risk-reward ratio of 2.5x. Meanwhile, if the target is expanded to $1.42 — a more aggressive approach — that ratio rises to 3.7x.
Bullish momentum has clearly accelerated, as the Relative Strength Index (RSI) has jumped above the signal line. If the oscillator rises past 60, that would further confirm that buyers are in control of the price action.