In summary:
XRP is up 13% amid a market recovery, but decreasing trading volume indicates weak buying momentum.
The Balance of Power (BoP) has dropped to -0.57, signaling seller dominance and increasing the risk of a trend reversal.
If demand remains low, XRP could decline to $2.13, but renewed interest could push it towards $2.94.
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XRP has increased by 13% in the past 24 hours, recovering alongside the broader cryptocurrency market after several days of decline. This recovery comes as major cryptocurrencies, which had fallen to multi-month lows, rebound from recent losses, bringing a temporary reprieve for investors.
However, despite the double-digit price increase, on-chain and technical data suggests that XRP’s rally may be short-lived.
XRP Price Surges, But There’s a Catch
The price of XRP has surged by 13% in the past 24 hours, recovering alongside the general cryptocurrency market after days of decline. This decline was fueled by concerns over tariffs imposed on Canada, Mexico, and China, initially announced on Feb. 1. However, with the tariffs being delayed for 30 days, market sentiment has improved, leading traders to resume accumulation.
Interestingly, despite this recovery, XRP’s rally may not be sustainable. Data suggests that the price increase is not driven by strong demand for the altcoin, raising concerns about its sustainability.
One such indicator is the token’s trading volume, which has dropped significantly over the past 24 hours. Totaling $22.39 billion at the time of writing, it has fallen by 22% in that period
When the price of an asset increases while trading volume decreases, it indicates weak buying momentum, as fewer traders are actively pushing the price higher. This points to a lack of strong demand, making the rally unsustainable and increasing the risk of a price reversal.
Furthermore, XRP’s negative Balance of Power (BoP) confirms that selling pressure remains dominant. At the time of writing, it stands at -0.57, reflecting the persisting bearish sentiment for XRP despite the price increase.
The BoP indicator measures the strength of buyers relative to sellers by analyzing price movements over a specific period. As with XRP, when the BoP is negative, it indicates that selling pressure is dominant, suggesting a bearish trend and a high probability of a trend reversal.
XRP Price Prediction: Will it Hold Recent Gains or Decline to $2.13?
Currently, XRP is trading at $2.57. This represents a 45% increase from Monday’s intraday low of $1.77. Once the general market rally subsides, XRP could lose its recent gains if demand remains low. In that case, its value could fall to $2.13
If bulls fail to defend the support level at this price point, XRP could slide below the $2 price area to trade at $1.48, a low it last reached in November.
On the other hand, a resurgence in demand for XRP would invalidate this bearish outlook. In that case, the token’s price could climb toward $2.94.
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