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XRP Faces Critical Support Level Amid Broader Cryptocurrency Selloff
After a sharp downturn in the crypto market on June 6, XRP price neared a vital support zone at $2.12, marking a 4% decline over the past 24 hours. Sliding sentiment and weakening momentum have contributed to XRP’s drop, prompting many investors to monitor the next moves closely. XRP's 24-hour trading volume surged nearly 80% to $2.97 billion due to intensified sell pressure, while data from CoinGlass showed a 70% spike in derivatives trading volumes. Interestingly, open interest declined by 3.7%, often indicating that long positions are being closed as traders rotate into short-term strategies during turbulent market phases.
Macro Events and Political Tensions Stir Market Volatility
XRP's latest decline mirrors the broader digital asset market downturn, largely driven by escalating political tensions. The standoff between former President Donald Trump and billionaire Elon Musk rattled investor confidence, resulting in a near 5% pullback in major cryptocurrencies. The feud grew sharper after Musk resigned from the Department of Government Efficiency and criticized a new federal spending bill, which led Trump to revoke a NASA nomination associated with Musk. Musk escalated matters by linking Trump to the Jeffrey Epstein files—sparking calls for impeachment—which Trump dismissed as evidence that Musk had "gone crazy." The events triggered a 14% drop in Tesla’s share price, and Musk later stated that SpaceX would retire its Dragon spacecraft.
Technical Analysis: XRP Navigates Downtrend with Key Support in Play
Testing the Limits: Bollinger Bands and Moving Averages
Analyzing XRP’s daily chart, the cryptocurrency is currently trading below the 20-day moving average and is hovering near the lower Bollinger Band at $2.07. This area represents a major support threshold within XRP's recent range of volatility. A decisive move below this level could open the door to further losses. The relative strength index (RSI), currently just under 40, indicates that momentum remains soft but has yet to reach oversold territory.
Most moving averages—spanning the 10-day to 100-day—are signaling bearish trends, with XRP’s price staying beneath them. The primary exception is the 200-day exponential moving average, now positioned near $2.08, which could serve as a critical support if bullish buyers emerge.
Oscillator and Sentiment Indicators
The moving average convergence divergence (MACD) remains negative, confirming the continuation of XRP’s downtrend. Meanwhile, short-term oscillators like the Stochastic RSI are in neutral territory, reflecting a market that is awaiting a definitive signal before committing to a new direction.
Potential Catalysts: Legal Developments and Institutional Commitments
Market participants are looking ahead to June 16, when a significant update in the ongoing Ripple v. SEC lawsuit is anticipated. Any news pointing toward a possible settlement could help reduce regulatory uncertainty, boost sentiment, and potentially spark a rebound in XRP’s price.
Beyond legal influences, institutional adoption is increasing. Notably, VivoPower has allocated $121 million to XRP as part of its corporate treasury strategy. Chinese technology company Webus International has also announced plans to establish a $300 million XRP treasury, while ACG, a subsidiary of Nasdaq-listed Hyperscale Data, aims to acquire up to $10 million in XRP by the end of 2025. Institutional interest is further highlighted by pending XRP ETF applications from Bitwise and Grayscale, with Franklin Templeton's decision expected on June 17.
Outlook: Key Factors to Watch as XRP Hovers Near Support
The combination of regulatory clarity, institutional allocation, and ETF developments could serve as powerful short-term catalysts for XRP. While uncertainty persists, a strong rebound may materialize if sentiment improves and buyers return around these crucial support levels. Traders and investors should keep a close eye on upcoming milestones for potential market-moving news.
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