XRP Price Drops 6% as On-Chain Data Suggests a Rebound Ahead

Highlights:

XRP price drops 6% to trade at $2.21 as of the time of writing.
On-chain data suggests a rebound ahead in the XRP price.
With the token roaming in the oversold region, the bulls may initiate a buy-back campaign triggering a rally to $2.45.

The XRP price has dwindled 6% to trade at $2.21 as of the time of writing. Despite the pullback, its daily trading volume has increased 71% to $21.4 billion, indicating a rise in market activity. This fall comes amid the waning crypto market led by Bitcoin and Ethereum, which have plunged 1% and 2%, respectively.

The tug-of-war for the third position in terms of market capitalization continues between XRP and Tether. XRP’s momentum has faded, as it has declined 14% in a week, struggling to reclaim the $2.45 mark. This has led to XRP conceding its third spot in terms of market capitalization to Tether.

XRP Statistical Data

Based on CoinmarketCap data:

XRP price now – $2.21
Trading volume (24h) – $21.4 billion
Market cap – $126.64 billion
Total supply – 99.98 billion
Circulating supply – 57.11 billion
XRP ranking – #4

XRP Price Technical Indicators Flash Bearish

After an impressive rally to $2.88 on December 3, the XRP price has faced a strong pullback as the crypto market takes a downturn. For about a week, the token has been trading within a narrow range, oscillating between $2.78 and $2.21, before the bears broke below the $2.21 mark. However, the bulls seem to be regaining composure, as they target the resistance level at $2.45, coinciding with the 50-day SMA.

Meanwhile, how the XRP price reacts to support at $2.21 will likely determine its direction in the short term. As a springboard, this support would allow bulls to build momentum as more traders buy into XRP, thus creating a suitable environment for a breakout. Although such a breakout targets key levels at $3 and $5, it will encounter other seller congestion zones at $2.45 and $2.65, respectively.

The RSI notably upholds a bearish sentiment, as it has hurtled below the 50-mean level, currently at 37.49. This means that the token is currently undervalued. However, if the bulls initiate a buy-back campaign as the token is roaming in the oversold region, they could initiate a rally, obliterating the $2.45 resistance zone.

On the other side of the fence, the Moving Average Convergence Divergence (MACD) introduces a new bearish outlook on the four-hour chart. A sell signal manifested when the blue MACD line flipped below the orange signal line, revealing that declines should be expected before the XRP price rebounds above $2.45.

Can XRP Bulls Regain Control and Rally to $4?

The overall trend in the XRP price remains bearish as the bears have the upper hand. If the bears continue dominating the market, with the falling RSI and a sell signal from the MACD indicator, the XRP price could plunge further. In such a case, the XRP price would fall, chasing the $1.92 support level.

On the flip side, if the $1.42 support holds, the token could bounce back and aim for a rebound, targeting the $2.45 resistance level. Moreover, a breakout fueled by increased market optimism and rising trading volume would bolster the bullish outlook, causing a rally to $4.

On-chain Metrics Suggest a Rebound Ahead in XRP Price

On-chain data metrics, on the other hand, present a rebound in XRP. For instance, the OI-weighted funding rate chart reveals a shift in sentiment among traders. This is because the token has sustained positive funding rates reflecting bullish dominance, as it is still in the positive. Currently, the funding rate is at 0.0096%, which suggests that the bulls may gain momentum, triggering recovery.