XRP price rebounded by over 5% on Wednesday as the crypto market rebounded. It jumped to $1.4200, up by nearly 30% from its lowest level this month.
Summary
- XRP price bounced back by over 5% on Wednesday.
- The rebound mirrored the performance of other coins.
- This recovery is likely a dead-cat bounce or a bull trap.
Ripple (XRP) token soared, with its market capitalization rising to over $86.6 billion. This rebound mirrored that of other tokens like Bitcoin (BTC), Morpho (MORPHO), Polkadot (DOT), and Avalanche (AVAX).
The main reason why XRP price jumped was because of the broader crypto market rally, which helped to push the market capitalization of all tokens rising by over 5% to over $2.4 trillion. Bitcoin jumped to $66,500, while Ethereum approached the key resistance level at $2,000.
The crypto market rally coincided with the ongoing recovery of the broader financial market. For example, futures tied to the Dow Jones rose by over 200 points, while those linked to the Nasdaq 100 and S&P 500 rose by 125 and 30 points, respectively.
XRP price rose as spot Ripple ETTs gained some assets on Tuesday. The funds added over $3 million after having no inflows in the previous two consecutive days. They now have over $1.22 billion in cumulative inflows, bringing the total assets to over $981 million.
XRP demand continued rising, with the futures open interest rising to over $2.3 billion from this week’s low of $2 billion. The volume in the spot market rose to over $3.1 billion.
XRP price technical analysis
The daily timeframe chart shows that the Ripple price rebounded by over 5.6% on Wednesday, reaching its highest level since Monday this week.
This rebound happened after it formed a doji candlestick pattern on Tuesday. A doji is made up of a small body and a small upper and lower shadow. It is one of the most common bullish reversal signs in technical analysis.
The rebound also happened after forming a double-bottom pattern at $1.3435 and a neckline at $1.6617.
Therefore, there is a likelihood that the token will continue rising, potentially to the key resistance level at $1.6617, which is up by 17.7% above the current level.
However, there is still a risk that the rebound is a dead-cat bounce, which is a situation where an asset in a freefall rebounds briefly and then resumes the downtrend.
The view that this is a dead-cat bounce will become invalid if it moves above the 100-day Exponential Moving Average and flips the Supertrend indicator from red to green.