Ripple (XRP) is extending sideways trading above the $2.00 support level at the time of writing on Friday, as the impact of the Federal Reserve (Fed) decision cools down.
The crypto market became victim of extreme volatility as investors digested a drastic interest rate cut by the Fed on Wednesday. Inflation risks and a weak labor market have emerged as factors that could lead the central bank to pause its monetary easing cycle, an approach that could continue to stoke macroeconomic uncertainty.
XRP adoption slows amid decline in on-chain activity
XRP Ledger (XRPL) has reported a significant decline in the number of active addresses since the beginning of November. The number of addresses actively transacting on the network averaged 20,000 as of Tuesday, up from about 25,000 on Nov. 21 and about 32,000 on Nov. 11, CryptoQuant data shows.
The decline indicates that user engagement has slowed significantly, reducing XRP adoption and buying pressure.
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Meanwhile, demand for OI represents the notional value of outstanding futures contracts; Therefore, continued decline from the record high of $10.94 billion in July continues to hamper the price recovery. Furthermore, the low OI suggests that investors are not confident that XRP can maintain the bullish trend in the near term, and they are choosing to remain on the sidelines.
Demand for XRP exchange traded funds (ETFs) remains steady, with inflows of nearly $16 million on Thursday. According to SoSoValue data, the cumulative flow volume currently stands at $971 million and is rapidly approaching the $1 billion milestone. Overall, the XRP ETF has net assets of $930 million.
Technical Outlook: XRP enjoys major support
XRP is trading above the $2.00 support at the time of writing on Friday. The cross-border remittance token also sits below the descending 50-period exponential moving average (EMA) at $2.06, 100-period EMA at $2.10 and 200-period EMA at $2.17 on the 4-hour chart, limiting recovery efforts and preserving a bearish configuration.
Moving Average Convergence Divergence (MACD) The green histogram bars have flipped slightly to the positive, while the blue MACD line stands just above the red signal line, reinforcing a neutral tone. The Relative Strength Index (RSI) is at 48 (neutral) edge, indicating a slight improvement in momentum.
A falling trend line from $2.58 limits gains, with resistance seen at $2.13. However, a sustained effort through this hurdle could encourage a broader rally.
XRP’s trend strength remains low as the Average Directional Index (ADA) has dropped to 9.76, consistent with a range-bound phase. The rising trend line from $1.82 outlines the base, providing support near $1.98 and holding above this floor will keep pullbacks in check. Conversely, a breakdown may accelerate negative pressure.
Crypto ETF FAQ
An exchange-traded fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can track not just a single asset, but also groups of assets and sectors. For example, a Bitcoin ETF tracks the price of Bitcoin. An ETF is a tool that investors use to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities and Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still awaiting regulatory permission. The SEC says the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the past few years.
Yes. The SEC approved the listing and trading of several Bitcoin spot exchange-traded funds in January 2024, opening the door for institutional capital and mainstream investors to trade the main cryptocurrency. The industry described this decision as a game changer.
The main advantage of crypto ETFs is the possibility of exposure to cryptocurrencies without ownership, thereby reducing the risk and cost of holding assets. Other advantages are a lower learning curve for investors and higher security as ETFs take charge of securitizing the underlying asset holdings. As far as the main drawbacks go, the main drawback is that as an investor you cannot have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are the high costs associated with holding crypto because ETFs charge fees for active management. Finally, even though investing in an ETF reduces the risk of holding the asset, price fluctuations in the underlying cryptocurrency are likely to be reflected in the investment vehicle as well.
(The technical analysis for this story was written with the help of AI tools)
