Ripple (XRP) has gone up by 2.3% in the past 24 hours after bouncing off a strong support at around $1.26 that could mark the beginning of a trend reversal if certain conditions are met.
Trading volumes have jumped by nearly 56% during this period, indicating strong buying pressure at this key level.
The absence of relevant economic data points this week, at least for the crypto market, could give the market some breathing room to recover some of the territory it has lost during this pullback phase.
Most tokens are hitting key support areas. However, XRP has underperformed its peers – e.g., Ethereum (ETH) and Solana (SOL) — lately.
With year-to-date losses of around 29%, the market appears to have shunned this altcoin as ETH and SOL have booked losses of 19% and 16%, respectively.
Wall Street Shunned XRP and Favored Solana Instead
One of the reasons for this divergence could be that the market is pricing in a slowdown in the rate at which the XRP Ledger is adopted by institutions in the United States, following Congress’s failed vote on the Clarity Act.
This was a major setback for XRP’s aspirations to operate in a more supportive legislative environment. Its approval would have given Ripple much more freedom to offer enterprise solutions to U.S. businesses for cross-border payments and more.
This also applies to the use of Ripple USD (RLUSD) as the settlement token for on-ramp and off-ramp solutions.
Wall Street has also demonstrated its lack of interest in XRP in recent months, as net inflows to exchange-traded funds (ETFs) linked to this altcoin have been on a downtrend for two months in a row, dropping from $159 million in August to just $10 million thus far in October.
Comparatively, Solana ETFs brought in $193 million in August and $272 million in September.
Meanwhile, we continue to see initiatives within the XRP Ledger that aim to increase the number of use cases for the network and its native assets. One example is a lending protocol proposal called XLS-66 that has already been approved by 53% of the blockchain’s validators.
This new on-chain feature would allow XRP holders to use the token as collateral and get Ripple USD (RLUSD) as the settlement token to place leverage bets and execute other sophisticated trading strategies.
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That said, this rebound failed to deliver a trend reversal, or at least it has thus far, as the price needed to climb above $1.31 during today’s session, and that did not happen.
If this area of support is broken, we could witness a much deeper correction for XRP in the next few days, potentially eyeing the $1 area as the next stop.
However, if the price manages to rise past $1.31 at some point and a V-shaped bullish pattern is confirmed, XRP could finally start its recovery.
The short squeeze that may result from such a move could be strong enough to catapult the token to $1.55 at some point, as long as it keeps climbing above the previous lower highs shown in the chart.
