XRP has shown resilience this week, rebounding 6% to reach $2.17 after successfully defending the critical support level of $2. This recent uptick sets a stage for traders as they monitor the key resistance zone between $2.28 and $2.30—an area that, if breached with a daily close above, could signal a much-anticipated trend reversal. Such a move might open the door to new price targets around $2.58, representing the first significant bullish shift for the cryptocurrency since July.
This recovery follows a brief dip on Monday, which pushed the asset below the psychologically significant $2 mark. As XRP looks to shake off a downtrend that has lingered since mid-year, market participants are hopeful that a breakout from the current structure is imminent.
Trading analysis indicates that if XRP surpasses the $2.30 resistance, an initial tug-of-war could occur between $2.34 and $2.42, where profit-taking is expected. The bounce back from near the price gap below $2, which formed after a rise from $1.80 on November 21, reflects the confidence that buyers have shown at these lower price levels. This compression under $2.30 seems to echo a coiling pattern poised for a major breakout.
Exchange-Traded Funds (ETFs) Fuel Market Confidence
In terms of momentum, XRP exchange-traded funds have recorded positive net inflows for 11 consecutive days, with total assets under management climbing to an impressive $844 million. On December 1 alone, these funds attracted a significant $89 million, even amidst broader market declines. Major providers such as Bitwise, Canary Capital, and Grayscale have stepped into the XRP ETF landscape, enhancing liquidity and attracting more investors to the asset.
The robust trading volume, which surged by 20% in the past 24 hours to nearly $5 billion, underscores a growing interest in XRP, now constituting about 4% of its circulating market cap. These sustained ETF inflows may provide much-needed support under the price, potentially forcing short sellers to reconsider their positions.
Mixed Signals Amid Technical Analysis
Technical indicators present a mixed bag of signals. The Relative Strength Index (RSI) hints at a potential bullish divergence, as momentum failed to establish lower lows amidst declining prices. Conversely, funding rates across the futures market remain negative, indicating that short positions currently dominate. Open interest in futures contracts has also diminished drastically, dropping from $8.6 billion to $3.8 billion over the last quarter. This decline suggests reduced trader commitment and could mean an opportunity for reversal if conditions align favorably.
Market analysts have noted a “three-drive exhaustion pattern” emerging on XRP’s chart over the past six weeks, suggesting signs of a possible upward shift. Notably, reclaiming the monthly volume-weighted average price—which currently sits at $2.22—could bolster efforts toward a price move closer to $2.50.
Critical Levels to Watch
The coming days will be crucial in determining XRP’s direction. Should XRP fail to break above $2.30, support is anticipated between $2 and $1.90. Falling below $2 would likely extend the ongoing downtrend since summer, prompting traders to keep a keen eye on order books for shifts in momentum.
Moreover, the 200-day exponential moving average emerges as another critical reference point. A break above this indicator would lend credibility to a bullish trend reversal. As XRP nears the upper boundary of a descending price channel formed in early October, a successful breakout could see prices target the $3.10 mark—a staggering 48% increase from current levels.
It’s important to note that negative funding rates below -0.01 could trigger a retest of the $1.90 to $2 range. However, historically, deeply negative funding conditions have often preceded sharp price reversals as they squeeze out short positions. As traders look ahead, the unfolding narrative for XRP in December is fraught with potential, yet remains contingent upon its ability to navigate these critical technical landscapes successfully.
