XRP (XRP) has gone down by nearly 15% in the past 30 days as the crypto market was spooked by the October 10 ‘Black Friday’ as massive liquidations could have knocked out bulls for good.
Trading volumes remain a bit high at $5 billion, accounting for 3.5% of the token’s circulating market cap.
Two days ago, a company called Evernorth announced that it was building a massive $1 billion treasury focused on XRP – the largest corporate action taken in favor of this token so far.
This provides a major credibility boost to the project, especially as Evernorth’s push is endorsed by a Japanese financial titan called SPI Holdings, along with many other prominent names from within the crypto space like Kraken and Pantera Capital.
“As we capitalize on existing TradFi yield generation strategies and deploy into DeFi yield opportunities, we also contribute to the growth and maturity of that ecosystem,” commented the head of Evernorth, Asheesh Birla, in regards to the initiative and its merits.
He added: “This approach is designed to generate returns for shareholders while supporting XRP’s utility and adoption. It’s a symbiotic model: our strategy is designed to align with the growth of the XRP ecosystem.”
The Ripple ecosystem has been steadily growing since the company scored a big win on the legal front last year. A long-standing battle with the U.S. Securities and Exchange Commission (SEC) was ultimately resolved in favor of Ripple, and could have paved the way for the launch of new decentralized applications powered by the XRP Ledger.
The launch of Ripple USD (RLUSD), the project’s native stablecoin, is also considered a pivotal moment for the ecosystem as it allows corporate users to send dollar payments through the XRP Ledger with minimal transaction costs.
It can be used to further strengthen Ripple’s value proposition and vision of becoming the world’s preferred solution for cross-border payments.
Ripple USD (RLUSD) Market Cap – Source: CoinMarketCap
The market cap of this stable asset has been steadily growing from just $50 million in December 2024 to $874 million at the time of writing. According to DeFi Llama, RLUSD is already the 12th largest token in this category, and is only $50 million away from rising to the 11th spot.
Despite these positive developments, the daily chart has flashed a major sell signal after the token broke below a key trend line support.
XRP/USD Daily Chart (Binance) – Source: TradingView
Although a bearish breakout like this by itself is not necessarily a high-probability setup, a successful retest confirmed that market participants are no longer willing to buy XRP at that particular level.
This means that what was a former demand zone has now turned into a supply zone. Looking at the chart, the key level in this case is $2.5.
Previously, investors bought XRP every time it dipped to that level. Now, sellers have outpaced buyers when the price reaches this threshold. Hence, this favors a bearish outlook as sellers seem to be in full control of the price action.
As a result of this move, we could see XRP dipping to $2 in the near term. That said, the Relative Strength Index (RSI) has climbed above the 14-day moving average, which could be an early indication that the latest wave of negative momentum is easing.
The key catalyst that could ignite an additional leg down would be a surprising inflation report in the United States this Friday that indicates that prices are climbing faster than analysts expected.
As long as the price stays below $2.5, the odds favor a bearish outlook, especially if inflation in September exceeds the market’s consensus estimate.
Alejandro Arrieche specializes in drafting news articles that incorporate technical analysis for traders and possesses in-depth knowledge of value investing and fundamental analysis.
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