Despite the Short-Term Correction, Market Analysts Remain Cautiously Optimistic

Despite the short-term correction, market analysts remain cautiously optimistic that XRP could be setting the stage for another rally—possibly toward the critical $3.00 resistance level.

Despite a short-term correction, market analysts are cautiously optimistic that XRP could be setting the stage for another rally—possibly toward the critical $3.00 resistance level.

The Detials

After hitting a high of $2.65 earlier this week, XRP price has slid to a low near $2.48. This minor dip came after a strong two-week rally that began at support around $2.12, boosted by wider bullish sentiment in the Ripple market and the broader crypto ecosystem.

At press time, XRP was trading at around $2.47, down 3.62% in the last 24 hours.

However, on-chain signals are showing a weakening trend. According to Santiment, the XRP Ledger has seen a sharp drop in network activity. The number of new addresses decreased from nearly 16,000 in January to about 3,400 as of May 7. This 78% decline in new wallet creation indicates reduced engagement and demand, potentially capping XRP’s upside potential in the short term.

Moreover, there were nearly $10.14 million worth of total liquidations in the last 24 hours—the lion’s share of them ($8.44 million) being long positions, as per CoinGlass data. This is suggestive that XRP traders who had wagered on its continued rise were surprised by the price turnaround.

Concurrently, open interest fell 1% to $5.41 billion, while trading volume reduced from $19.5 million in the first half of the week to $8.69 million. Speculation decline is likely to enhance market volatility, with leveraged positions being closed and risk being realigned by traders.

The cryptocurrency is still trading above several key technical indicators, including the 50-day, 100-day, and 200-day exponential moving averages (EMAs). The moving averages are dynamic levels of support, which means the overall bullish structure remains intact even during the recent periods of disruptions.

From the charts, XRP is still above the $2.50 mark and slightly above its 100-hour simple moving average. The price seems to be consolidating now and is giving some respect to the support zone of $2.48, which is also the 61.8% Fibonacci retracement level of the last rally from $2.42 to $2.65.

If XRP slips below $2.48, it could be setting up a move lower to $2.45 or even back to $2.42. But bullish traders are eyeing the $2.58 and $2.60 resistance levels. A nice breakout through them could set up the retest of the recent $2.65 peak—and potentially set the stage for a move higher toward $2.72 or even $2.88 if buying pressure returns.

Now, the hourly MACD is starting to weaken a bit, and the RSI fell below 50, showing that bull strength is fading—but not yet extinct. There is still room for a reversal if buyers reassert themselves.

Besides the fluctuation in price, the greater narrative of XRP is still the ongoing legal battle. The long-running case between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) is still a driving force that informs the manner in which the market views XRP.

Ripple has prevailed in some court cases along the way, like a significant ruling that declared XRP not to be a security when it trades on secondary markets. The case is still not over, however. Most investors watch with great interest to see the outcome, knowing that a final decision has the potential to have a gigantic effect on the price of XRP and its legality in the U.S.

Moreover, Ripple CEO Brad Garlinghouse has already expressed that the company may go on and do an IPO once the SEC case is behind them—which has only just added fuel to the present Ripple saga in the crypto world.