The XRP price has rebounded in the past few days, moving from this month’s low of $1.8173 to the current $2.20. This rebound followed the latest approval of the Franklin and Grayscale XRP ETF and the warm reception from American investors. Here are the top reasons the Ripple price may crash soon.
XRP Price to Crash as Investors Sell the News
One of the most common concepts in the financial markets is to buy the rumor and sell the news. In this case, the XRP price rose ahead of the ETF approval, meaning that investors may sell the news soon.
Indeed, data shows that whales used the recent rally to dump 180 million tokens worth over $397 million, and this selling may continue.
Data compiled by SoSoValue shows that all spot XRP ETFs added over $168 million in inflows, bringing the cumulative total to over $586 million. These funds now hold $628 million in assets, equivalent to 0.46% of the market capitalization.
Canary’s XRPC has had over $322 million in inflows, while Bitwise, Grayscale, and Franklin have accumulated $152 million, $80 million, and $65 million, respectively. This growth will likely continue in the coming months as demand rises.
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Technicals Suggest that the Ripple Price May Retreat Soon
Meanwhile, technicals suggest the ongoing XRP price rebound could be a fakeout, as the token faces numerous bearish catalysts.
For example, the Average Directional Index (ADX) indicates that the XRP price is not particularly strong. It also remains below the 50-day and 100-day Exponential Moving Averages (EMAs), a sign that the downtrend remains intact.
XRP price remains below the Supertrend and Ichimoku cloud indicators. In most cases, cryptocurrencies tend to remain under pressure as long as they are below these indicators. A bullish breakout is normally confirmed when the price moves above these indicators.
Therefore, there is a possibility that the ongoing XRP price rebound is a dead-cat bounce, which is a brief rebound that happens when an asset is in a freefall.
The biggest risk is if the XRP price drops below this month’s low of $1.8173. A move below that support will signal further downside, potentially to the psychological level at $1.
Another reason the XRP price may retreat is that it lacks a clear near-term bullish catalyst. Its top catalyst recently was the ETF approval, which has already happened. As such, the coin may pull back as investors wait for the next driver.
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