Recent Trends in XRP Inflows
Net inflows of XRP tokens to centralized exchanges surged into positive territory early Thursday, reversing a trend of outflows that had persisted for several days. This shift brings XRP into the spotlight, especially following a record-setting month for its native decentralized exchange (DEX).
According to data from Coinglass, over $15 million in XRP was deposited to centralized exchanges, with the majority of inflows directed towards platforms like Bybit and Kraken. This uptick in spot inflows suggests that traders may be positioning themselves to sell tokens on the open market, which could hinder any potential rally in XRP’s price.
Understanding Market Sentiment
In the XRP perpetual futures market, the 8-hour funding rates were recorded at -0.0065% as of Thursday morning. This negative funding rate indicates a prevailing sentiment favoring short positions, which profit from declines in price. Notably, XRP’s funding rates are more negative than those of leading cryptocurrencies like Ethereum (ETH) and Bitcoin (BTC).
The negative rates suggest that traders holding short positions are willing to pay a small fee to those taking long positions, indicating a strong bearish sentiment in the market.
XRP’s Current Position Relative to Moving Averages
XRP is currently trading below several critical moving averages, including the 10-day exponential moving average (EMA) at $2.84 and the 21-day EMA at $2.88. Trading beneath these averages is a strong indicator of a bearish short-term outlook for the cryptocurrency.
However, it’s worth noting that the 100-day simple moving average (SMA) is just above $2, while the 200-day SMA sits at $1.30. Both of these averages lie below the current trading price, hinting at a potentially bullish trend in the longer term. Moving averages serve as valuable tools for traders, as they help smooth out price fluctuations and identify prevalent trends.
Resistance Levels and Potential Upside
Currently, XRP faces immediate resistance at the $2.49 level, followed by the $2.60 mark. Should the price manage to break through these resistance levels, it could reinvigorate bullish sentiment, paving the way for a potential rise towards the $3 level—an area XRP successfully breached in January for the first time since 2018.
Analyzing the Relative Strength Index (RSI)
As of the latest Asian trading hours, XRP’s 14-day relative strength index (RSI) stood just above 36, placing it within the neutral zone. For context, an RSI value above 70 typically indicates overbought conditions, while a value below 30 signifies oversold conditions. An RSI hovering around 50 is considered neutral, suggesting that XRP is currently in a state of equilibrium in terms of price momentum.
In summary, while short positions dominate the current market sentiment for XRP, traders should remain cautious as they navigate through key support and resistance levels, all while keeping an eye on the longer-term bullish indicators.
