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XRP, the digital asset closely followed by many within the cryptocurrency community, is currently facing a challenging market environment. Despite several attempts to initiate a significant rally, the price of XRP has been unable to break past a critical resistance level, a situation attributed to a notable increase in selling pressure. According to an analysis by independent trader Dom, who shared insights via a market update earlier today, XRP has struggled to move beyond a key volume-weighted average price (VWAP) that tracks back to the asset’s peak in April 2021. This particular VWAP acts as a significant marker, delineating a boundary that has consistently kept every rally in check since mid-May. The analysis, which draws on data from the 12-hour Binance chart, shows that as of 12:18 UTC-4, XRP was trading at $2.4375, marking a modest 2.08% increase in the session but still faltering below the much-watched ATH VWAP.
The selling pressure on XRP is evident from the data referenced by Dom, highlighting a net outflow of 240 million XRP from spot exchanges over the last week. A substantial portion of this sell-off, amounting to roughly 180 million XRP, purportedly occurred on Coinbase and the South Korean exchange Upbit. In contrast, Binance’s XRP transactions remained relatively stable. This considerable market selling, coupled with only a modest engagement from passive buyers, explains why XRP’s price action has been largely stagnant. Furthermore, the analysis underscores that XRP is barely clinging to its monthly and quarterly VWAPs, which are positioned around $2.31 and $2.28, respectively. The fear is that losing these levels could slide XRP into a zone of ‘mid-range noise’ until it potentially drops below $2.20, a scenario that would significantly weaken its market position.
Parallel to the ongoing scenario with XRP is the broader crypto market’s performance, particularly Bitcoin’s (BTC), which has been oscillating within a wide consolidation zone. The correlation, or at times, the lack thereof, between XRP and BTC movements has done little to provide reprieve to XRP enthusiasts. Notably, any slight advancement in BTC value has been met with an increased selling activity in XRP, limiting its potential for gains. This dynamic further compounds the challenges facing XRP, as highlighted by Dom’s analysis, which points to a crucial juncture where XRP must either surpass the ATH VWAP to aim for higher resistance levels or face a downturn below critical support levels.
As the crypto community keenly watches these developments, XRP remains at a crossroads, encapsulated in a tug-of-war between escalating selling pressure and diminishing buy-side support. This precarious balance underscores the broader volatility and unpredictability intrinsic to the cryptocurrency market. With XRP trading around $2.36 at the time of reporting, the asset’s immediate future remains uncertain, hinging on its ability to navigate through these technical thresholds and regain its former momentum amidst a challenging market sentiment. As the situation unfolds, stakeholders remain vigilant, ready to adapt to whatever direction the market heads next.
