XRP Price Recovery: Emerging Opportunities Amid Declines
XRP has seen a turbulent month, with its price plummeting nearly 23% over the past 30 days. This significant decline marks one of the steepest downturns in recent quarters. However, there are glimmers of hope as XRP has bounced back by 6% in just the last 24 hours. Technical and on-chain metrics indicate that the bearish trend may be nearing its end, hinting at a possible recovery.
Investor Losses Hint at a Market Bottom
Recent on-chain data depicts a landscape of investor exhaustion, a phenomenon often associated with market bottoms. One of the key indicators to watch is the Net Unrealized Profit/Loss (NUPL), which shows whether investors are profiting or suffering losses on their holdings. A deeply negative NUPL indicates widespread loss among holders, typically signifying capitulation.
As of October 17, XRP’s short-term holder NUPL has plummeted to a one-year low of –0.20, while the token hovers around the $2.30 mark. Notably, the last time NUPL dipped to such lows was in April and June, events that preceded substantial rebounds. For instance, on April 8, when NUPL hit –0.13, XRP gained a stunning 20% in just four days. Similarly, on June 22, NUPL at –0.15 foreshadowed a 74% rally over the following month.
Understanding Long-Term Holders’ Composition
The long-term holder NUPL, which tracks the profitability of older and more entrenched investors, has also experienced a downturn, now sitting at a six-month low of 0.53. A previous occurrence of this magnitude resulted in a notable bounce, with XRP rebounding from $2.38 to $2.62—a 10% increase.
Both NUPL metrics declining simultaneously underscore widespread investor fatigue, potentially paving the way for a recovery. This phenomenon often emerges during market corrections and can set the stage for renewed buying interest.
Momentum Indicators Support the Reversal View
Alongside the on-chain data, momentum indicators are offering further validation of a potential rebound in XRP’s price. The Relative Strength Index (RSI), a commonly used technical tool to gauge the strength or weakness of price movements, is currently indicating a hidden bullish divergence.
From April 7 to October 10, XRP has formed higher price lows while the RSI has marked lower lows. This pattern indicates that the market may still be in an uptrend but is temporarily experiencing a cooldown. The divergence signals underlying strength in XRP, suggesting the market might have further potential even amidst recent challenges.
Key Levels to Confirm an XRP Price Recovery
Technical analyses of XRP’s price structure bolster the narrative of an impending recovery. Three significant "death crossovers" have already transpired, characterized by shorter-term moving averages crossing below longer-term ones. Specifically, the 20-day EMA has settled beneath the 100-day and 200-day EMAs, while the 50-day has also dropped below the 100-day.
These phenomena frequently signal the nearing end of a bearish phase, hinting that the recent downward trend may be exhausting itself. Currently, XRP’s price is around $2.35. A daily close above $2.44 would serve as the first strong indication of bullish momentum. A continued move past $2.59—near the critical 200-day EMA—could clear the path toward higher targets of $2.82 and even $3.10.
Conversely, should the price dip below $2.28, the recovery narrative could weaken significantly, with potential retests of support levels at $2.08 or, in a more bearish scenario, down to $1.77.
Summary of Insights
XRP’s recent performance interweaves various technical and on-chain metrics, highlighting a potentially transitional moment for the cryptocurrency. Investor sentiment exhibits signs of capitulation, while momentum indicators and key price levels suggest that a recovery could be on the horizon, making it an interesting watch for traders and investors alike.
