On Tuesday, XRP showed signs of recovery, stabilizing above the significant 100-day Exponential Moving Average (EMA), following a turbulent session that saw the cryptocurrency dip to $2.69 the previous day. This decline prompted considerable liquidations, but XRP managed to hold onto a short-term support level of $2.83. The current outlook suggests three potential scenarios for XRP in the coming days: it may trade sideways around the $2.83 mark, initiate a rebound toward the critical $3.00 level, or continue its downward trend, potentially testing the $2.50 support level.
As Ripple focuses on the advancement of institutional Decentralized Finance (DeFi), it recently unveiled an updated roadmap that emphasizes the tokenization of real-world assets (RWAs) and aims to launch a native lending protocol in the fourth quarter. Notably, the XRP Ledger (XRPL) has surged in prominence, now ranking as a top-ten blockchain for RWAs, boasting over $1 billion in monthly stablecoin volume. Improvements to the XRPL have enhanced support for stablecoin payments and collateral management, which are essential for Ripple’s strategy.
Tokenization of RWAs is being positioned as the cornerstone of “real-world finance.” Ripple asserts that regulatory compliance is crucial for adoption, with features such as Decentralized Identifiers (DID) aimed at enabling organizations to verify identities while maintaining compliance with Know Your Customer (KYC) regulations. In addition, permissioned domains and a permissioned decentralized exchange (DEX) are being developed to create user-controlled environments and facilitate secondary markets for RWAs and foreign exchange.
Ripple is also set to introduce the Credit On-Chain lending protocol, which will incorporate pooled lending backed by underwritten credit at the ledger level. This protocol is designed for institutional users, allowing for short-term, uncollateralized loans with predetermined amortization schedules. “The lending protocol enables pooling liquidity from a broad base of smaller investors into institutional-sized loans while maintaining compliance, offering borrowers access to more efficient funding and allowing lenders to earn yield on otherwise idle assets,” Ripple explained.
However, recent trends indicate a decline in retail interest in XRP. The futures Open Interest (OI) dropped to $7.64 billion from $8.79 billion, underscoring a growing uncertainty among traders regarding XRP’s potential for a near-term uptrend. This decline suggests that many investors are retreating from their positions, fearing further downward movement in the market.
Currently, XRP is hovering above the critical 100-day EMA, with bullish momentum attempting to assert itself as the Relative Strength Index (RSI) shows signs of upward reversal. A daily close above this EMA could signal a strengthened bullish sentiment, potentially paving the way for a rise towards the $3.00 level. Conversely, if bulls fail to maintain their position, the focus will shift to lower support levels, including the $2.70 mark and possibly the 200-day EMA at $2.59.
Traders are advised to watch for signals from the Moving Average Convergence Divergence (MACD) indicator, which may indicate a buy signal if the blue line crosses above the red signal line, encouraging increased investment. As of now, the MACD has been signaling a sell since Monday, reflecting the current cautious sentiment in the market.
