XRP extends rebound as ETF inflows and sentiment improve

Bitcoin has crossed the $81,000 barrier and is slowly approaching $82,000.

The leading cryptocurrency is up by 0.5% in the last 24 hours, with altcoins recording bigger gains during that period.

Ripple’s XRP is one of the best performers among the top 10 cryptocurrencies by market cap.

The remittance token is up by nearly 2% on Wednesday and is trading at $1.42. 

The positive performance comes as retail demand for XRP has stabilised over the past few weeks, with the  Crypto Fear & Greed Index rising to 50 on Wednesday, up from 40 recorded on Monday. 

XRP ETF inflows return amid steady retail demand

The primary driver behind XRP’s positive performance is the growing interest in XRP spot Exchange-Traded Funds (ETFs).

Data obtained from CoinGlass’s ETF page shows that US-listed XRP spot ETFs saw an inflow of $11.5 million on Tuesday, significantly higher than the $3.87 million recorded the previous day. 

XRP’s cumulative inflows stand at $1.29 billion, with net assets under management at $1.07 billion. 

Steady inflows into ETFs are important for maintaining positive market sentiment and increasing the likelihood of a sustained breakout and an uptrend.

The derivatives data also indicate that retail interest in XRP is growing.

The futures Open Interest (OI) reads $2.63 billion on Wednesday, up from the $2.55 billion recorded the previous day. 

Conversely, OI surged to $10.94 billion in July, mirroring XRP’s all-time high of $3.66.

This highlights the pivotal role of retail participation in driving and maintaining upward price momentum.

Technical outlook: XRP targets the $1.51 resistance 

The XRP/USD 4-hour chart remains bearish and efficient as Ripple is trading at $1.42 per coin.

It has surged past the 50-day Exponential Moving Average (EMA) at $1.41 but remains well below 100-day and 200-day EMAs at $1.51 and $1.74, respectively.

The momentum indicators suggest that the bulls could push XRP’s price higher in the near term. 

The Relative Strength Index (RSI) at 69 on the 4-hour chart leans extremely positive, suggesting a decisive bullish impulse.

At the same time, the negative but contracting Moving Average Convergence Divergence (MACD) histogram on the same chart hints that downside momentum is fading rather than reversing.

If the rally persists, XRP would encounter immediate resistance at the 100-day EMA at $1.51.

The buyers would likely convert the 50-day EMA at $1.41 into a strong support level if the price action remains bullish. 

A daily close above that zone would be needed to ease the prevailing bearish tone and open the way toward the 200-day EMA at $1.74. 

However, if the bears regain control of the market and close the daily candle below $1.39, XRP could retest the monthly open price at $1.37 in the near term.

While the market conditions remain bullish, some traders are cautious that the recent rally could be a bull trap.