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XRP is trading within a tight range, moving between $2.38 and $2.49 in the last 24 hours. Despite market volatility, it stayed above the $2.38 support level. This range-bound movement indicates a period of stable consolidation, marked by steady trading volume and signs of accumulation by large investors.
At the midday session, XRP experienced a retest of its support level at $2.40, indicating increased institutional participation. The market reacted with dip buying, which reversed losses and got the price back over $2.45. This behavior aligns with accumulation patterns, which are often related to the positioning of larger market players.
Technical indicators marked the creation of higher lows on the short-term time intervals. This trend has secured the upward channel movement of XRP, exhibiting a controlled upward bias. Nevertheless, the price action has continually encountered resistance at $2.55, limiting short-term momentum and preventing the price from breaking through the ceiling of the consolidation.
On the derivatives side, trading activity showed a decline in speculative interest. Open interest declined by 1.4%, and total trading volume fell by 10%. Funding rates shifted slightly into negative territory at -0.0007%, suggesting a minor bias toward short positions.
However, based on on-chain data, XRP exchange reserves have fallen by 3.36% since early October. Historically, accumulation trends have been associated with lower exchange reserves, usually held by long-term or institutional investors. This decreases selling pressure and encourages investors to hold the currency for a longer period.
Also Read: XRP Faces 1000% Liquidation Imbalance as Price Drops Below $2.20
Ripple's decision to lock over 126 million XRP tokens has created uncertainties concerning future supply and market forces. This move results in a reduction of the circulating supply, which may cause a supply shock that can impact future pricing. By eliminating these tokens from circulation, Ripple demonstrates a long-term emphasis on preserving value through controlled scarcity.
This supply control mechanism is one of the factors that help make the market predictable, especially with the use of the escrow system by XRP to release a set number of tokens every month. Implementing such a systematic process will decrease the chance of unexpected token dumping and add a level of predictability to XRP's trading environment. This predictability is advantageous for institutional investors seeking less volatile exposure to crypto assets.
Additionally, Ripple's recent regulatory progress has improved XRP's market position. An XRP ruling in the United States opened the door to a legal grey area as a non-security. These developments may add to the broader adoption and development of long-term growth strategies across various regions.
