XRP Price: Volatility Surfaces Following Significant Whale Transfer – Should You Sell or Buy The Dip?

Following Bitcoin’s bullish rally that uplifted the crypto market, the release of US CPI data on Tuesday morning triggered notable volatility. XRP experienced a decline from its weekly peak of $0.53 to $0.52, marking a 1.3% drop, while BTC attempted to stabilize above $48,000 after dropping from its two-year high of $54,400 in December 2021.

What Lies Ahead for XRP Price?

The market could encounter further downward pressure as the week progresses. Persistent high US inflation, contrary to expectations, spells trouble for investors in risk assets like Bitcoin. Despite this, the Federal Reserve shows no inclination to hasten rate cuts, with reports suggesting a probable delay in the first rate cut from March to July, influenced by Chair Jerome Powell’s firm stance post the previous FOMC meeting.

As the dust settles, signs of immediate recovery are evident in XRP price. However, reclaiming the current resistance at the 50-day Exponential Moving Average (EMA) is crucial to instill confidence in the upward trend. Although the Relative Strength Index (RSI) remains neutral, it has dipped below 50 from near overbought conditions on Monday. Should the decline persist, investors may consider acquiring XRP at lower prices, around the 61.8% Fibonacci level at $0.51 and the 78.6% Fibonacci level at $0.5.

Opportunities to capitalize on the dip abound, but amidst the volatility, traders will exercise caution to avoid falling into bull traps. A four-hour candle closure above the 50-day EMA S/R, coupled with a breakout above the 50% Fibonacci level at $0.5253, could signal the onset of a bullish trend. While XRP has the potential to ascend to $1, managing expectations and anticipating pullbacks from key resistance levels, such as the 200-day EMA at $0.5352 and subsequent hurdles at $0.6 and $0.75, is advisable.

Are Whales Offloading XRP?

Hours before the sharp decline in XRP price, Whale Alert reported a substantial transfer of XRP to Binance. The whale transferred 200 million XRP, valued at around $106 million at the time, from an undisclosed wallet, indicating a potential intention to sell. Investors typically transfer crypto to exchanges when contemplating selling, and given XRP’s rise from $0.48 at the beginning of February, the transfer is unlikely to be coincidental.

For now, traders remain vigilant for a potential trend reversal, with movement above the 50% Fibonacci level signaling a buy opportunity. Conversely, a plunge to sweep liquidity at $0.5 before a significant breakout could also occur.