XRP Dips 10% Following US Crypto Reserve News

XRP saw a remarkable surge of 30% yesterday after its inclusion in the US crypto reserve, which elevated its price to over $2.90 for the first time in a month. This substantial rally was met with a swift correction, as the altcoin fell by 10% in value just a day later.

The current dip in XRP price indicates profit-taking among traders. Whether the asset can regain its upward trajectory or continue this downward trend will hinge on critical resistance and support levels, particularly with eyes on $2.75 and $2.52.

XRP's RSI Indicates Neutral Position After Overbought Surge

Following the announcement of its inclusion in the US crypto reserve, XRP's momentum drove its Relative Strength Index (RSI) to a staggering high of 84.5. The RSI, a momentum oscillator, ranges from 0 to 100, indicating overbought conditions when above 70 and oversold below 30.

Currently, with an RSI of 63, XRP has cooled from its previous overbought status, suggesting a tapering off of buying momentum. Should the RSI continue to decrease towards the neutral 50 level, XRP may experience further consolidation or even a deeper correction.

Conversely, if buyers return and push the RSI over 70 again, this could signify a return of strong bullish momentum.

Ichimoku Cloud Analysis Indicates Bullish Indicators Remain

Analysis of XRP through the Ichimoku Cloud reveals that the recent breakout above the cloud (Kumo) confirmed strong bullish momentum. This has allowed XRP to maintain a position above both the Tenkan-sen (blue line) and Kijun-sen (red line), indicating robust short and medium-term trends.

Despite this bullish setup, there has been a pullback, bringing the price closer to the Kijun-sen. A successful hold above this line could facilitate further consolidation, while a deeper correction bringing XRP towards the cloud would imply diminishing buying strength.

Challenges Ahead for XRP to Reach $3

Although XRP quickly approached $2.95 due to its crypto reserve inclusion, the current technical landscape suggests potential difficulties in sustaining this momentum as selling pressures increase. The outlook initially depends on whether the buying interest can restore itself.

Should buying pressure re-emerge, obstacles to watch include the resistance level at $2.75, and if broken, XRP could retest the significant $2.96 level. A successful breach could pave the way towards $3.15, which has not been achieved since February 1. Developments such as the SEC dropping its case against XRP could act as a catalyst for this movement.

However, if bearish selling pressures mount, XRP could see support around $2.52, and further declines could lead to critical support at $2.36 and even as low as $2.06 if negative sentiment persists.

Analysts, such as Harrison Seletsky of SPACE ID, have expressed surprise at the assets included in the US crypto strategic reserve, stating, “I’m certainly surprised that US President Donald Trump has chosen to announce a full-blown crypto strategic reserve, rather than just a Bitcoin strategic reserve, as everyone had been expecting. The choice of assets is also unusual.”

Without substantial buying support, XRP may struggle to regain footing above the psychological $2 mark and could experience further challenges ahead.