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XRP price has recoiled in the past few months, mirroring the performance of Bitcoin and most altcoins. It was trading at $2.05 today, Dec. 9, much lower than the all-time high of $3.6830.
Still, its technicals and the ongoing Ripple ETF inflows suggest that the token will rebound in the coming weeks.
XRP Price Technicals Suggest that a Rebound is Coming
The daily timeframe chart shows that the XRP price has been in a strong downward trend. It has formed a series of lower lows and lower highs since July this year.
All its attempts to rebound have found substantial resistance. This is a move that has coincided with the performance of the broader crypto market.
This chart shows that the token has now bottomed at the 50% Fibonacci Retracement level. There, it has struggled to move below in the past few months.
Most importantly, there are signs that the Ripple price has slowly formed a falling wedge pattern. It is made up of two descending and converging trendlines. It has also formed a small inverted head-and-shoulders pattern, which also leads to a breakout.
The two lines of the Percentage Price Oscillator (PPO) have started to point upwards, a sign that this is a bullish divergence pattern.
A move above the descending trendline will confirm the bullish breakout. The trendline connects the highest swings since July. The breakout could push the price to $3, up 50% from the current level.
However, there is a caveat to this bullish XRP price forecast. A drop below the key support level at $1.7662 will invalidate the bullish outlook and point to more downside.
Such a move may see it drop to the 61.8% Fibonacci Retracement level at $1.6435. The psychological level at $1.500 followed this.
XRP ETF Inflows Are Soaring
One of the most important catalysts for the XRP price is American investors continuing to accumulate the token. They are doing so partly because of its strong fundamentals in the financial services industry.
The Securities and Exchange Commission (SEC) approved the first XRP ETF on November 14 this year. This led to a first-day inflow of $243 million. Canary’s XRPR ETF still holds the first-day trading volume this year with nearly $60 million.
The SEC then approved more ETFs by companies like Grayscale, Bitwise, and Franklin Templeton. Notably, these ETFs have had inflows on each trading day, accumulating over $935 million in assets.
According to SoSoValue, XRP ETFs had over $38 million in inflows on Monday. It’s a notable figure considering that Bitcoin ETFs had an outflow of $60 million.
Ethereum ETFs had an inflow of $35 million, while Solana had just $1.1 million. This is a sign that XRP has become a more popular asset among American investors.
Indeed, Solana ETFs, which were approved in October, have accumulated over $640 million in inflows since their inception.
Ripple’s Growing Ecosystem May Boost XRP Token
The other potential catalyst for the XRP price is that Ripple’s ecosystem is growing, a move that will create more utility for the token.
Ripple USD, the stablecoin it launched in December last year, has continued growing this year, and currently holds over $1.3 billion in assets. $350 million of these tokens are in the XRP Ledger, which is a sign of the growing ecosystem and usage.
Meanwhile, Ripple Labs has made four crucial acquisitions this year. This is a move that is expected to create value for the XRP and the RLUSD stablecoin.
It acquired companies like Palisade, Hidden Road (now known as Ripple Prime), GTreasury, and Rail. These companies handle billions of dollars a year, some of which will be routed through the XRP Ledger over time.
Still, the main risk for the XRP price is that demand in the futures market has dropped in the past few months. The futures open interest has dropped to $3.65 billion, down from the year-to-date high of $11 billion.
This is also happening in CME, where the XRP and XRP mini futures contracts have dropped. For a rebound to happen, these futures metrics will need to start rising.
