XRP reclaims $2.00 amid ETF inflows, stable derivatives market

XRP eyes breakout as ETF inflows extend

US-listed XRP ETFs had a bullish debut, recording nearly $180 billion in inflows last week and $243 million the week before. SoSoValue data shows the crypto products accessed directly via stock exchanges, with a cumulative total net inflow volume of approximately $423 million and net assets of $384 million on November 21.

Canary Capital’s XRPC ETF posted approximately $619,000 in net inflow on Friday, while Bitwise’s XRP ETF was the best-performing with $11 million.

Steady ETF inflows reinforce positive sentiment around XRP, which could bolster risk appetite and increase the chances of a steady recovery above $2.00 in the short to medium term.

XRP flaunts a weak but stable derivatives market, with the futures Open Interest (OI) averaging between $3 billion and $4 billion over the past two weeks.

CoinGlass data shows OI, which tracks the notional value of outstanding futures contracts, averaging $3.61 billion on Monday, up from $3.28 billion on the previous day. OI must steadily rise to support risk-on sentiment, as investors increase their risk exposure.

XRP Futures Open Interest | Source: CoinGlass

Chart of the day: XRP holds key support

XRP is trading at around $2.06 at the time of writing on Monday, supported by an uptrending Relative Strength Index (RSI) on the daily chart. The RSI at 39 and rising indicates that bullish momentum is increasing, as traders position themselves above the critical $2.00 level.

A daily close above $2.00 would back bullish sentiment and increase the chances of an extended uptrend above resistance at $2.24, which was tested on Wednesday. Further action above the same hurdle could pave the way for gains targeting the 50-day Exponential Moving Average (EMA) at $2.38 and the 200-day EMA at $2.52.

Still, the Moving Average Convergence Divergence (MACD) indicator has maintained a sell signal since November 16, encouraging investors to reduce their risk exposure.

The red histogram bars below the zero line indicate that bearish momentum remains apparent. If short-term support at $2.00 gives way, the path of least resistance will remain downward, as sellers target a retest of support at $1.82.

Traders will watch for a buy signal, which occurs when the blue MACD line crosses above the red signal line, indicating a bullish shift.

Cryptocurrency prices FAQs

How do new token launches or listings affect cryptocurrency prices?

Token launches influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.

How do hacks affect cryptocurrency prices?

A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.

How do macroeconomic releases and events affect cryptocurrency prices?

Macroeconomic events like the US Federal Reserve’s decision on interest rates influence crypto assets mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.

How do major crypto upgrades like halvings, hard forks affect cryptocurrency prices?

Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs.