XRP has recovered from this week’s sharp sell-off after defending the $1.07 support area, as traders weigh the emerging bullish chart breakout against persistent geopolitical and regulatory risks that continue to rise.
summary
- XRP rebounded from $1.07 after defending key support, while a breakout of the downward channel revived bullish sentiment.
- RSI bullish divergence, improving MACD momentum, and liquidation sets near $1.14 support the case for further upside.
- Geopolitical tensions, ETF outflows, and uncertainty over the CLARITY Act remain key risks that could derail the recovery.
According to data from crypto.news, XRP (XRP) The price was trading near $1.09 at press time after bouncing from Tuesday’s low of around $1.07, though it remained below the July 4 peak near $1.18.
Risk appetite improved slightly after the initial associated sell-off Escalating US-Iranian tensions It eased, but sentiment across the altcoin market remains cautious after more than $400 million was liquidated earlier this week. XRP itself accounted for over $8.6 million in long liquidations during the sell-off, underscoring how large the leveraged positions were for the decline.
In addition to the recovery story, says analyst Gerla He believes XRP has completed a remarkable technical milestone.
“XRP has just broken out of its downward channel. It is now retesting the breakout while the RSI prints a bullish divergence. If support holds, this could be the start of the next wave higher.”
While the short-term bounce has attracted new buyers, institutional sentiment has not yet fully recovered. XRP Spot Exchange Traded Funds registered Nearly $7.29 million in net outflows on July 8, the largest single-day withdrawal since March.
At the same time, legislative uncertainty continues beyond the White House It missed its target on July 4 to pass the CLARITY Act, leaving investors without the regulatory catalyst many expected to support digital assets over the summer.
The technical structure favors a recovery if XRP stabilizes above the key support level
The daily chart shows that XRP is holding above its 20-day simple moving average near $1.05 after briefly falling below the psychologically important $1.10 level. Although the price remains below the 50-day, 100-day and 200-day moving averages of $1.17 to $1.46, the 20-day average has stabilized, while Chaikin’s money flow has risen back above zero, indicating that capital is starting to return after several weeks of distribution.
The 4-hour chart is showing a more positive setup. XRP has reclaimed the 0.382 Fibonacci retracement level near $1.076 and is trying to establish support around the 0.5 retracement level at $1.097.
At the same time, the MACD histogram has almost returned to positive territory with the MACD and signal lines converging, while the RSI rebounded towards 42 after recording higher lows despite the price recording new local lows. This bullish divergence aligns closely with Gerla’s thesis for a bearish channel breakout.
The positioning of derivatives also leaves room for volatility. CoinGlass liquidation data shows one of the largest short liquidation pools at around $1.14, with additional liquidity concentrated near $1.18.
A sustained move through these levels could cap forced short positions and accelerate the rally towards the 50-day EMA near $1.18. Conversely, downside liquidity has become weaker until around $1.07, reducing immediate liquidation pressure if buyers continue to defend current levels.
Macro risks still threaten the bullish setup
Many external risks can quickly negate the recovery scenario despite improving chart signals.
Geopolitical uncertainty remains the most pressing concern after the United States launched strikes against Iranian military targets and President Donald Trump formally ended the previous ceasefire framework. Any further escalation in the Middle East could renew demand for defensive assets and put pressure on cryptocurrencies, especially higher-beta cryptocurrencies like XRP.
Regulatory developments also remain unresolved. The Senate’s delayed vote on the CLARITY Act continues to weigh on sentiment, while institutional demand could remain weak if ETF flows remain negative. Cross-chain activity also showed that wallets with large holdings distributed tens of millions of XRP during the recent decline, suggesting that some whales continue to reduce exposure to bounces.
From a technical perspective, missing the support at $1.07 would invalidate the emerging breakout structure and expose XRP to June swing lows near $1.01. A decisive move above $1.10 would strengthen the bullish case, while a recovery of $1.14 and then $1.18 could shift momentum back in favor of the buyers and open the door for another attempt to reach the late May highs.
Disclosure: This article does not constitute investment advice. The content and materials contained on this page are for educational purposes only.
