5 Reasons Why XRP Price Isn’t Ready for Recovery?

XRP price holds above the key $2.80 level after a broader crypto market rebound in response to weak JOLTS Jobs Openings data. However, several headwinds, such as technical chart weakness, negative whale flow and other on-chain data, and uncertainty surrounding spot XRP ETF approval, have delayed the much-needed XRP price recovery.

5 Factors Holding Back XRP Price Recovery

XRP price recovery seems delayed due to various factors declining positive sentiment among traders, from rising XRP exchange inflow and reserves to technical chart indicators signaling weakness.

Exchange Inflow and Exchange Reserves Rise

The total XRP coins held in crypto exchanges continue to grow, indicating higher selling pressure and volatility. As per the Exchange Reserve metric on CryptoQuant, 9 out of 11 crypto exchanges recorded rising XRP reserves in a week.

XRP held on Binance climbed from 2.92 billion to 3.6 billion as of September 3. Notably, XRP price has dropped more than 25% after hitting an ATH of $3.65 after Ripple Chairman Chris Larsen started booking profits, erasing investors’ bullish sentiment on a further rally.

Moreover, the Exchange Inflows metric on CryptoQuant showed that 9 out of 11 crypto exchanges saw continuous transfers of XRP to exchanges amid muted flows. Binane saw more than 2.1 million XRP inflow into the exchange, signaling higher selling pressure.

Negative XRP Whale Flow

Whale flows have turned deeply negative as XRP price faced renewed distribution pressure similar to earlier this year. The ATH price top coincided with sustained whale distribution and a subsequent correction.

CryptoQuant’s XRP Whale Flow 30-DMA data showed extreme selling by whales after more than 99% holders were at a profit during the recent rally in XRP.

Also, Whale Alert reported that a whale dumped over 35 million XRP worth more than $99 million to crypto exchange Coinbase in the last 24 hours. Long-term holders are offloading their holdings in the crypto market due to a potential bull market peak in September-October.

Open Interest Declines Amid XRP ETF Uncertainty

XRP open interest continues to decline amid negative sentiment among traders. The uncertainty around the timeline for spot XRP ETF approval has kept investors at bay.

Notably, many issuers including Grayscale, Bitwise, Canary, 21Shares, WisdomTree, and CoinShares have filed for XRP ETF. However, the SEC kept delaying its decision, with final deadline to approve or deny ETF applications on October 17. Notably, Bloomberg analysts set 90% odds of approval of spot XRP ETF.

Per Coinglass, the total XRP futures open interest fell nearly 0.50% to $7.53 billion in the last 24 hours. However, XRP futures OI on CME climbed more than 2.73% on CME but declined 0.80% on Binance in the last 4 hours, respectively.

Technical Chart Indicators Signal Weakness

Several indicators and patterns signal weakness currently. The investors have turned bearish on XRP as the price trades significantly below the 50-MA at $3.09 in the daily timeframe. The 100-MA and 200-MA are at $2.69 and $2.48, respectively.

Moreover, the Relative Strength Index (RSI) dropped to 43 in line with the price, signaling potential for further downside move. XRP price may likely consolidate under the $3 psychological level until the spot ETF approval.

While XRP price rebounded from the Fibonacci golden zone, it could fall below $2.70 in the absence of any positive catalyst. Ripple’s boost for tokenization, cross-border payments, and regulatory alignment failed to trigger a recovery. Moreover, the bullish momentum after the end of Ripple vs SEC lawsuit has faded.

Popular analyst Ali Martinez warned that XRP price could fall to $2.35 next if bulls failed to hold above $2.74. Traders must watch for a break above $2.90 and $3 for a rally towards $3.70.

CrediBULL Crypto said XRP/BTC has hit range lows and local demand. Investors may again look for a fresh entry around $2.72.

Broader Crypto Market Uncertainty

The broader negative sentiment in the crypto market has also impacted XRP price rally amid rising US inflation readings and the Fed concerns. Traders and whales now eye multiple jobs reports this week, which would lock a 25 bps rate cut by the Fed in September.

Focus has turned to the ADP private payrolls report due today. Also, the latest weekly jobless claims, likely to edge higher, and the key August nonfarm payrolls data release on Friday will provide cues on near-term market direction.

The Fed rate decision on September 17 remains a key deciding factor for a broader crypto market recovery. XRP price could also witness a rebound.