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Despite a massive inflow of over $1.4 billion from institutional investors, XRP (Ripple) has plummeted below all moving averages, drawing the attention of investors worldwide who are wondering if it can defend its final support line of $1.27 and lay the groundwork for a dramatic rebound. Amidst the hawkish stance of the U.S. Federal Reserve (Fed) and Bitcoin (BTC)'s sluggish performance, XRP's price, despite buying pressure attempting to defend the $1.35 to $1.37 range during the day, ultimately broke through the $1.30 support level and has now fallen to around $1.28. This represents a roughly 65% drop from its peak of $3.66 recorded after its legal victory, and under unprecedented pressure, it stands at a crossroads: will this decline be a precursor to further collapse, or will it be a Bear Trap triggering a short squeeze (buying pressure resulting from the liquidation or covering of short positions)?
According to the investment media outlet TradingNews on May 29 (local time), XRP's current technical structure shows a clear short-term downtrend. The price has plummeted below the 20-day, 50-day, 100-day, and 200-day Exponential Moving Averages (EMAs) simultaneously, while the Relative Strength Index (RSI) has also dropped to 43, below the neutral baseline of 50, indicating weakening buying interest and intensifying downward momentum. For a future trend reversal, XRP must first reclaim the EMA cluster zone between $1.41 and $1.48, and a full recovery can only be expected once it surpasses the long-term resistance of $1.69. The market is currently experiencing a tense standoff between concerns of further decline due to a symmetrical triangle pattern and expectations of a cup-and-handle pattern targeting $1.70. Therefore, whether XRP can hold the final bottom at $1.27 and break through the $1.45 resistance will be a critical turning point determining its future direction.
What's interesting is the paradoxical situation where continuous institutional capital inflow into Ripple Spot ETFs (Exchange-Traded Funds) and price declines are moving in opposite directions. Since its launch last November, Ripple Spot ETFs have accumulated over $1.44 billion in net inflows, with a substantial $118 million entering in May alone. Experts analyze that this strong institutional buying pressure is acting as a buffer, absorbing profit-taking by existing holders and selling pressure, rather than driving the market upward. Although it is not immediately boosting prices, the fact that institutions are continuously allocating significant funds is interpreted as a strong bullish signal supporting long-term structural confidence.
Leveraged positions in the futures market are also condensed like a ticking time bomb, ready to explode. The XRP market currently has approximately $227 million worth of short position liquidation leverage accumulated, indicating an excessive concentration of forces betting on a decline. This structure directly clashes with the institutional accumulation trend seen through spot ETFs. If buying pressure enters and breaks through the key resistance levels of $1.41 and $1.45, it could trigger a powerful short squeeze as sellers rush to buy to prevent losses, potentially leading to an explosive surge that surpasses actual fundamentals.
Behind this bearish trend are macroeconomic headwinds weighing down the entire cryptocurrency market and the gravitational pull of Bitcoin's decline. As the U.S. Core Personal Consumption Expenditures (PCE) price index hit 3.3%, with inflation soaring to a three-year high, the hawkish Fed, led by Kevin Warsh, gained strong justification to maintain its high-interest-rate stance, sharply contracting liquidity for risk assets. The price decline, despite the complete resolution of the legal dispute in August last year when the U.S. Securities and Exchange Commission (SEC) dropped its appeal, is attributed to fatigue from the dissipation of positive news and a general risk-off sentiment in the market. Ultimately, even if XRP increases its real-world adoption in the $150 trillion global cross-border payment market, leveraging its fast settlement within 3 seconds and near-zero fees, its short-term direction will inevitably remain dependent on the Fed's monetary policy and Bitcoin's stability.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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