XRP is showing tentative signs of stabilization after a sharp six-day sell-off, but a fragile macroeconomic backdrop and political uncertainty continue to weigh on the cryptocurrency. The token has shed roughly 17% over the past week, making it the second-worst performer among the top 10 digital assets by market capitalization, trailing only Zcash.
Despite the negative momentum, XRP's daily Relative Strength Index (RSI) has entered deeply oversold territory, a condition that often precedes a short-term bounce. Analysts suggest a recovery toward the $1.20 resistance level is possible, but caution that such a move may not mark the end of the broader downtrend. The cryptocurrency still faces the risk of falling below the psychologically important $1 mark.
Institutional Participation Remains Muted
XRP's recent underperformance is partly attributed to lackluster institutional interest. According to SoSoValue, XRP exchange-traded funds (ETFs) recorded no inflows or outflows on Wednesday, signaling that institutional investors are not increasing their exposure. This follows a $10 million net outflow on Monday, the largest single-day withdrawal since March 2026, and an additional $7 million outflow on Tuesday, bringing the weekly total to $17.6 million.
Macroeconomic factors are adding further pressure. Stronger-than-expected U.S. inflation data has heightened concerns that the Federal Reserve may maintain a restrictive monetary policy stance. CME Group's FedWatch tool now shows a 15% probability of a 50-basis-point rate hike at the December meeting. While still relatively low, the emergence of such expectations reflects growing inflation anxiety.
The Crypto Fear and Greed Index has fallen to 26, placing the market firmly in fear territory. This suggests investors are increasingly cautious about holding digital assets amid monetary policy uncertainty and regulatory developments. Until these headwinds ease, XRP may struggle to establish a sustained recovery.
Technical Outlook: Oversold RSI Points to Potential Rebound
On the daily chart, XRP has reached the midpoint of its second bullish fair value gap (FVG), an area that previously attracted buying interest. This FVG represents a critical support zone that could determine whether the cryptocurrency stabilizes or extends its decline below $1.
Momentum indicators support the possibility of a rebound. The daily RSI has entered deeply oversold territory after six consecutive days of selling pressure. An RSI reading below 30 typically indicates oversold conditions, although cryptocurrencies can remain oversold for extended periods during strong downtrends.
If XRP successfully defends its current support area, buyers could push the price toward the $1.20 resistance level. A sustained move above this level would signal improving buying momentum. However, the more significant resistance lies near $1.35, which XRP would need to reclaim over the coming weeks to strengthen the case for a broader bullish reversal.
The downside risk remains substantial if XRP fails to hold its current support zone. The psychological $1 level is a key threshold for traders. A decisive breakdown below this area could accelerate selling pressure and expose XRP to a deeper correction. The next support below $1 is at $0.98, and a daily close below this level would be particularly bearish, potentially opening the door to lower demand zones around $0.80.
For now, XRP's deeply oversold RSI suggests that a temporary rebound could develop before sellers attempt another move lower. Investors will be watching whether the token can hold above $1 and reclaim key resistance levels to confirm a more durable recovery.
This article is for informational purposes only and does not constitute financial advice.
