XRP Shows Signs of Cooling After Rally, Volume Decline May Indicate Temporary Pause Not Reversal

• XRP’s price retreated from $3.70 to $3.18 amid reduced weekend trading volume.

• On-chain data shows a slight capital outflow, reflecting a broader market cooldown, not XRP-specific weakness.

• COINOTAG analysis confirms the 200-day EMA and 21-day EMA support an intact macro uptrend for XRP.

XRP trading volume falls 37% after a rally, signaling market cooldown but bullish momentum remains. Stay updated with COINOTAG’s expert crypto insights.

What Is Causing XRP’s 37% Decline in Trading Volume?

XRP’s 37% drop in trading volume is primarily due to typical weekend market behavior, characterized by lower liquidity and thinner order books. This decline follows a recent rally where XRP reached a local high near $3.70 before retreating to $3.18. Despite the volume drop, technical indicators like the 200-day and 21-day EMAs confirm the ongoing bullish trend.

How Does XRP’s Price Action Reflect Market Sentiment?

XRP’s price chart reveals rapid upward movements followed by sharp multi-day corrections. The recent bounce from $3.10 suggests the asset is consolidating rather than reversing. The Relative Strength Index (RSI) at 62 indicates cooling from overbought conditions, supporting a healthy market pause rather than a decline.

Why Is the Volume Decline Not a Bearish Signal for XRP?

The 37% volume decrease coincides with a weekend session, historically a period of reduced trading activity across major cryptocurrencies like BTC and ETH. On-chain metrics show a slight capital exit from XRP, but this is consistent with a broader market cooldown rather than XRP-specific weakness. Such pauses are normal after intense rallies and can precede renewed buying interest.

What Are the Key Technical Indicators Supporting XRP’s Bullish Trend?

Technical analysis highlights that XRP remains above its 200-day Exponential Moving Average (EMA), a critical long-term support level. The 21-day EMA continues to provide short-term support, while the RSI’s moderation signals a balanced momentum. These factors collectively confirm an intact macro uptrend, suggesting XRP’s price could stabilize above the psychological $3.00 mark.

What Is the Outlook for XRP’s Price and Volume Moving Forward?

XRP’s near-term trajectory depends on liquidity returning after the weekend and maintaining support above $3.00. If volume picks up midweek, the bullish structure may strengthen. However, sustained volume declines could signal deeper market weakness. For now, the 37% volume drop is best viewed as a temporary pause in an ongoing uptrend.

How Does Market-Wide Activity Affect XRP’s Performance?

Market-wide volume declines among major cryptocurrencies like BTC and ETH indicate that XRP’s volume drop is part of a broader trend. This suggests that investor behavior is influenced by overall market conditions rather than XRP-specific factors. Such insights are critical for traders assessing XRP’s risk and momentum.

Frequently Asked Questions

What factors contributed to XRP’s recent price correction?

XRP’s price correction from $3.70 to $3.18 was influenced by a natural market cooldown after a strong rally and lower weekend trading volume, which is typical in crypto markets.

How does the weekend trading volume impact XRP’s market behavior?

Weekend trading usually sees reduced liquidity and thinner order books, causing temporary volume drops that do not necessarily indicate a long-term trend change.

Key Takeaways

• XRP’s 37% volume decline is a typical weekend market cooldown, not a bearish reversal.
• Price remains supported above $3.00, with key EMAs confirming a bullish macro trend.
• Market-wide volume drops across major cryptocurrencies suggest broad investor caution, not XRP-specific weakness.

Conclusion

XRP’s recent 37% drop in trading volume reflects a healthy market pause after a strong rally, supported by key technical indicators like the 200-day EMA and RSI. While volume is down, the asset maintains a bullish structure above $3.00. Investors should watch for midweek liquidity to confirm continued momentum. COINOTAG will continue monitoring XRP’s performance to provide timely updates.

With a 37% decline in trading volume, XRP is clearly showing signs of exhaustion, following weeks of euphoric momentum. As of July 27, the asset has retreated to $3.18 from a local high of about $3.70, and its momentum has been noticeably waning.

The price chart shows a pattern of rapid upward movement that is followed by a multi-day sharp correction. But the recent recovery from about $3.10 indicates that XRP is still holding onto the bullish structure, albeit with less vigor. With the Relative Strength Index (RSI) hovering around 62 right now, the market is cooling off from earlier overbought levels. With the 200-day EMA well below the current price and short-term EMAs, particularly the 21-day, still supporting the asset, an intact macro uptrend is confirmed.

XRP/USDT Chart by TradingView

The situation is more complicated on the volume side. Daily trading volume has declined from a peak of over $50 million to just $31 million, a 37% decline. Context is important even though this appears concerning: The drop occurs during a weekend session, which is typically associated with lower liquidity and thinner order books.

Weekends have historically allowed cryptocurrency markets to relax rather than being a sign of prolonged bearishness. More significantly, on-chain data indicates a slight exit of capital from XRP as well as the larger cryptocurrency market. It is clear that this retrace is market-wide rather than XRP-specific because the overall market volume is down across majors like BTC and ETH as well.

It is not necessarily a bear market when activity temporarily declines. It is normal and healthy to cool down after an intense rally. XRP may continue if it can sustain support above the psychological $3.00 level and consolidate with rising volume in the middle of the week. The trajectory of XRP for the time being depends on incoming liquidity and whether bulls return after the weekend. However, the 37% volume decline is probably just a pause and shouldn’t be interpreted as a trend reversal.