XRP Price Is Feeling the Heat This Week as a Wave of Volatility Sweeps Through the Crypto Market

XRP is feeling the heat this week as a wave of volatility sweeps through the crypto market. After briefly reclaiming ground above $2.00, the token tests that key support level again.

Rising macroeconomic headwinds have placed a damper on crypto's recent wave of volatility, with XRP feeling the heat as key support is tested.

What happened: After briefly reclaiming ground above $2.00, the token is now testing that key support again. Broader macro concerns, especially renewed trade tensions between the U.S. and China, have weighed on risk assets, dragging down both stocks and crypto.

On top of that, investors seem to be getting jittery. Large amounts of XRP are being moved onto exchanges, usually a sign that holders might be looking to sell, and traders are slashing their positions, with long position liquidations spiking to $5.1 million in the last 24 hours. As more people are betting on downside moves, which is visible in the quickly shifting long-to-short ratio, the market trend feels more defensive than optimistic in the short term.

XRP Ledger Exchange Inflows Chart | Source: CryptoQuant

XRP Derivatives Data | Source: Coinglass

What's new: Despite all the short-term pressure, a longer-term narrative could benefit Ripple (NYSE:PYPL) - a potential XRP ETF.

As Kaiko Research highlights, XRP shows signs of improved market depth and a more favorable regulatory outlook compared to other tokens like SOL, which is crucial for an ETF approval. However, with a new SEC Chair just stepping in and the process taking time, it’s unlikely to happen immediately.

Those hopes are getting dashed even further as May 22 is fast approaching, and there’s still no clear sign of an approval for Grayscale’s (NYSE:GS) or any other trusts’ conversion to ETFs.

Also in Brief: A new report from the CCFA highlights the staggering recovery of the crypto market from the 2022 bear market. From a low of $908 billion in December 2022, the total market cap has climbed to $1.56 trillion by April 2025, showcasing a resilience that belies the turbulent year.

The report also sheds light on the significant role played by stablecoins in facilitating seamless transactions within the crypto ecosystem. In 2022 alone, over $10 quadrillion in value flowed through stablecoins, triple the total value of transactions conducted in the U.S. dollar.

This incredible volume underscores the increasing reliance on stablecoins for facilitating rapid and efficient transactions within the crypto sphere.

Crucial levels to watch: The XRP price began its recent move within a tight trading range between $2.11 and $2.15 before experiencing a breakout to the upside, which was short-lived. After testing the resistance level near $2.19, the XRP price faced strong selling pressure, forming a descending channel.

This downtrend has continued, with XRP consistently making lower highs and lower lows. During the decline, the RSI showed multiple overbought conditions (greater than 70) near key peaks and dropped into oversold territory (less than 30) several times, suggesting persistent bearish momentum with occasional attempts at recovery. The triple top formation at the channel’s upper boundary confirms the strength of the ongoing downtrend.

Chart 1, Analyzed by Alokkp0608, published on April 16th, 2025

The MACD indicator, which stands for Moving Average Convergence Divergence, reinforces this bearish sentiment with multiple Death Crosses, which occur when the 12-period EMA (Exponential Moving Average) crosses below the 26-period EMA, indicating sustained selling pressure. However, there were also brief periods of Golden Crosses, signaling temporary relief rallies as the 12-period EMA crosses above the 26-period EMA.

Currently, XRP has approached the highlighted support zone around $2.05, a level that previously acted as an area of demand. The RSI is nearing 36, suggesting that XRP could be nearing oversold conditions again, which may lead to a short-term bounce if buyers step in at this level. However, the latest Death Cross on the MACD suggests that continued caution is warranted.

What to keep in mind: XRP is feeling the heat. Key support at $2.00 is being tested as exchange inflows spike and traders book losses.

On a brighter note, a possible spot XRP ETF approval later this year could still benefit Ripple in the long run. As Kaiko Research points out, XRP shows signs of better liquidity and a more favorable regulatory climate compared to other tokens like Solana (CRYPTO:SOL), rendering it a better candidate for an ETF, according to the report. However, with a new SEC Chair just stepping in and the process taking time, it’s unlikely to happen immediately.