Ripple’s XRP Remains Strong Amid Selling Pressure

Ripple’s XRP has recently experienced a decline, falling to $1.91, marking a 2% drop on Friday. However, the market shows a lack of strong sentiment.

New analytical data indicates that while XRP continues to correlate with volume flows, the transition from selling pressure to predominant buying has not yet occurred.

Missing Buying Power

As analyzed by CryptoQuant, the correlation between XRP’s 30-day price and the Cumulative Volume Delta (CVD) is approximately 0.61. This indicates a moderate positive relationship between price fluctuations and net volume flows. Such a correlation suggests that the recent price changes remain closely aligned with trading activity instead of detaching from volume behavior.

CryptoQuant mentioned that this correlation typically confirms a consistent structural trend, reflecting stability between price and volume.

Despite this, the latest CVD readings reflect negative territory, suggesting that selling pressure has yet to morph into sustained buying dominance. This situation delineates the indicator as a ‘confirmation score,’ assessing ongoing trends without providing direct trading signals.

The indicator’s utility lies in identifying divergences; if prices rise amid weakened correlations or persistent negative CVD, it signals potential internal weakness. Currently, however, the stability of a positive correlation, even with price softening, hints at XRP potentially undergoing a foundational phase rather than an aggressive sell-off.

FUD Spikes, But ETFs Keep Buying

In light of XRP’s struggles this week, Santiment’s data found that XRP has entered a realm of ‘Extreme Fear’ as retail traders exhibit skepticism following a substantial decline from its January high. The analytics firm highlighted that significant negative commentary has historically been a precursor to rallies, noting a pattern where price movements often defy retail expectations. Santiment stated, “Major FUD is typically a precursor to a rally.”

Analyst Ali Martinez emphasized monitoring crucial support levels for XRP, indicating that maintaining above $1.78 is essential. The subsequent resistance areas fall within the $1.97 to $2.00 range.

Institutional interest remains visible, albeit modest, as XRP ETFs continue to garner new investments. Data from SoSoValue indicated that these funds attracted $2.09 million in net inflows on January 22.