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 happened after the latest approval of the Franklin and Greyscale XRP ETF and the warm reception by 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 market recommends buying the rumors and selling 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 that the ongoing XRP price rebound could be a fakeout as the token has some numerous bearish catalysts.
For example, the Average Directional Index (ADX) shows that the XRP price strength is not all that strong. It also remains below the 50-day and 100-day Exponential Moving Averages (EMA), a sign that the downtrend is still intact.
XRP price remains below the Supertrend and Ichimoku cloud indicators. In most cases, cryptocurrencies tend to remain under pressure as long as it is 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 point to more downside, potentially to the psychological level at $1.
The other reason why the XRP price may retreat is that it lacks a clear bullish catalyst in the near term. 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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