XRP extends its recovery on Thursday as improving derivatives sentiment and technical indicators suggested that selling pressure was beginning to weaken.
XRP is trading above $1.32 after breaking above the upper boundary of a falling channel pattern, a development that could mark the beginning of a broader recovery if buyers maintain control.
Derivatives data from CoinGlass showed that funding rates for XRP had turned positive, indicating an improving appetite for leveraged bullish positions.
However, XRP continues to face substantial resistance from its major exponential moving averages, while its long-to-short ratio suggests that bearish positioning has not fully disappeared.
XRP funding rates turn positive
Derivatives market conditions have improved for XRP following the recent cryptocurrency market downturn.
According to CoinGlass, funding rates for the altcoin moved into positive territory on October 30 and remained positive on Thursday.
XRP’s funding rate currently stands at 0.0103%. When funding is positive, traders holding long positions generally pay those holding short positions.
This typically indicates that bullish exposure is attracting greater demand in the perpetual futures market.
The positive readings therefore suggest that traders are becoming more willing to position for price appreciation in XRP.
Despite the improvement in funding rates, XRP’s broader derivatives positioning remains mixed.
CoinGlass data shows that the cryptocurrency’s long-to-short ratio stood at 0.97 on Thursday.
A reading below 1 indicates that short positions outnumber long positions under the metric being measured.
This suggests that bearish positioning remains relatively prominent among XRP derivatives traders. The imbalance could limit bullish momentum if selling pressure increases near important resistance levels.
XRP breaks above falling channel resistance
XRP’s daily chart shows an encouraging technical development after the cryptocurrency moved above the upper trendline of a falling channel.
A breakout above its upper boundary can signal that bearish momentum is weakening and that buyers are beginning to challenge the prevailing downtrend.
However, the cryptocurrency continues to trade below its major exponential moving averages.
The 100-day EMA stands at $1.323, followed by the 50-day EMA at $1.335 and the 200-day EMA at $1.378. These indicators represent important overhead resistance levels.
The concentration of moving averages above the current price suggests that XRP’s recovery could encounter selling pressure before developing into a more sustained bullish trend.
A successful breakout above the descending channel is constructive, but confirmation would require XRP to reclaim these moving averages.
Momentum indicators also point to improving conditions for XRP, although neither has confirmed a decisive bullish reversal.
The Relative Strength Index (RSI) stands at 51 on the daily chart. Readings above 50 generally indicate that bearish momentum is getting weaker amid improved buying pressure.
Meanwhile, the Moving Average Convergence Divergence (MACD) indicator has registered a positive crossover, with its main line moving slightly above zero.
The crossover suggests that short-term momentum is improving relative to the recent trend. Taken together, the RSI and MACD readings support the possibility of additional upside.
XRP faces its first significant resistance at the 100-day EMA near $1.323. A daily close above this level could encourage buyers to target the 50-day EMA at $1.335.
Beyond that, the 200-day EMA at $1.378 represents another important obstacle. Reclaiming all three moving averages would improve XRP’s technical outlook and suggest that the recent breakout is developing into a more convincing trend reversal.
Under that scenario, attention could shift toward the horizontal resistance levels at $1.540 and $1.900.
On the downside, immediate support is located around $1.265, corresponding to the previously broken upper boundary of the falling channel.
This level could act as a retest zone if XRP experiences a short-term pullback. A successful defense of $1.265 would support the bullish breakout structure.
Conversely, a daily close below that level would weaken the recovery outlook and increase the likelihood of renewed selling.
The next major downside levels would be $1.160 and the psychological $1.000 threshold.
AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.
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