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XRP’s price action reveals a complex interplay between bullish accumulation and bearish structural resistance, signaling cautious optimism among traders.
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Recent data indicates that while spot buyers maintain dominance, XRP’s price remains confined within a critical supply zone, limiting immediate upside potential.
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According to COINOTAG, “the Network Value to Transactions (NVT) ratio decline suggests XRP may be undervalued amid rising utility, yet price momentum remains subdued.”
XRP faces a formidable supply zone near $2.3, with mixed signals from volume and momentum indicators suggesting limited short-term rally potential.
XRP Supply Zone at $2.3 Remains Formidable Amid Mixed Market Signals
The XRP market currently contends with a significant supply zone around the $2.3 mark, which has proven to be a robust resistance level. This zone aligns closely with the 38.2% Fibonacci retracement of the recent downtrend from $3.4 to $1.61, underscoring its technical importance. Despite spot buyers showing strength through capital outflows and accumulation patterns, the overall price momentum remains constrained by a bearish swing structure on the daily timeframe.
Technical indicators provide a nuanced picture: the Relative Strength Index (RSI) has hovered just above the neutral 50 level, signaling tentative bullish momentum but not yet confirming a decisive trend reversal. Meanwhile, the On-Balance Volume (OBV) indicator has been range-bound since April, unable to surpass previous highs but forming higher lows, which suggests underlying accumulation without strong breakout conviction.
Liquidity Clusters and Potential Price Reversals Highlight Market Caution
Analysis of the two-week liquidation heatmap reveals a dense liquidity cluster between $2.29 and $2.36, indicating a critical battleground for XRP price action. This concentration of stop-loss orders and pending liquidations near the current market price suggests that any upward movement toward $2.36 could trigger significant market reactions. A bearish reversal from this zone is plausible, especially if XRP fails to sustain buying pressure beyond this resistance.
Such a reversal would likely impact traders who anticipate a breakout, emphasizing the need for cautious positioning. The current buying pressure, while present, lacks the intensity required to break through the supply zone decisively, implying that XRP may continue to trade within this range until clearer momentum emerges.
Capital Outflows and NVT Ratio Indicate Accumulation but Limited Rally Potential
Capital outflows from exchanges have moderated in early June compared to the heavier outflows observed in May, signaling ongoing accumulation by investors. Additionally, the decline in XRP’s Network Value to Transactions (NVT) ratio points to a potential undervaluation relative to its transactional utility, a positive fundamental indicator. However, these factors have not yet translated into a strong price rally, reflecting a market in consolidation rather than expansion.
Market participants should monitor these metrics closely, as sustained capital outflows combined with improving NVT ratios could set the stage for a future breakout. Until then, the prevailing bearish swing structure and resistance at the $2.3 supply zone suggest a cautious approach to trading XRP.
Conclusion
XRP’s current market dynamics illustrate a delicate balance between accumulation and resistance. While fundamental indicators like capital outflows and NVT ratios hint at underlying strength, technical analysis reveals persistent bearish structures and significant liquidity barriers near $2.3. Traders should remain vigilant for potential reversals within this range and consider the limited momentum before committing to bullish positions. A clear breakout above the supply zone, supported by volume and momentum, will be critical to confirming a sustained upward trend.
