XRP (XRP) is consolidating above the $1.32 support area despite this week’s macro headwinds, while social mentions appear to be favoring the beginning of a strong recovery ahead.
This altcoin has booked a 3% gain in the past 24 hours at $1.33, following a disappointing Producer Price Index (PPI) yesterday that briefly pushed its price to $1.28.
In addition to a higher-than-expected print in the Consumer Price Index (CPI) on Wednesday, we may have anticipated a strong drop ahead.
However, analysts did not change their view regarding this month’s interest rate decision by the Federal Reserve. In fact, odds of a rate hike in October dropped from 22% before these inflation figures to 17% at the time of writing.
This could give the crypto market the necessary breathing room and may have been the reason why prices have bounced back after briefly dipping below key support levels.
As a result, short liquidations spiked to $180 million yesterday and may continue to rise in the next few days if top tokens like XRP start to break past former resistance levels.
Social Volumes Flashed “Buy” in Late September
Net inflows to exchange-traded funds (ETFs) linked to XRP have dried up in October, as investors have poured less than $13 million into these vehicles during the first 15 days of the month.
If we close below the $30 million mark, that would result in a 75% drop in net inflows compared to September’s print of $121 million.
Despite these temporary headwinds, a signal among the noise may have confirmed that a bull market for XRP has started already.
According to data from Santiment, social volumes, a metric that tracks the number of times a token is mentioned across multiple channels, flashed a signal that has accurately anticipated strong rallies for XRP on three out of four occasions in the past two years.
The signal pops up when the 30-day moving average rises above the 200-day MA. This happened in mid-September, back when XRP started its ascent toward its recent $1.60 high.
We see this is as a strong indication that retail investors may start to jump on board. This is a key phase that typically unfolds at the beginning of bull markets.
Although the signal is still mild compared to historical levels, it might provide further evidence that the $1.32 level is an advantageous entry price for a long position with a long-term scope.
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See all Ripple forecastsXRP Needs to Stay Above $1.25 to Keep This Rally Going
Looking at the daily chart, we can see that XRP is currently consolidating above $1.32 after that brief drop. However, the token still needs to recapture the 200-day exponential moving average (EMA) to jump back into bullish territory.
The Relative Strength Index (RSI) sits at 38, meaning that bearish momentum is still strong. This altcoin is not out of the woods yet, and we may still expect a strong decline to $1.25 before a true recovery commences.
However, we see the latest bounce as evidence that demand continues to be strong at these low levels. That said, if that support is lost, the odds of a deeper correction would increase dramatically, potentially eyeing the $1.10 area next.
