XRP Awaits a Catalyst to Resolve Its Market Conflict

• XRP long-to-short ratio on Binance dropped from 3.57 to 2.87 as traders cut bullish exposure.
• On-chain data shows whales sold 460 million XRP, while smaller wallets accumulated 130 million tokens.
• XRP chart displays a falling wedge, with potential 78% upside if confirmed, targeting $5.20.

On August 21, the share of XRP long accounts among top Binance traders dropped from 78.12% to 74.15%, while shorts climbed from 21.88% to 25.85%, data shows. This pushed the long-to-short ratio down from 3.57 to 2.87 in less than 24 hours.

In terms of open positions, longs stood at 65.98%, with shorts making up 34.02%, bringing that ratio down to 1.94, its lowest point in weeks. This adjustment signals significant caution as markets await Powell’s address at the Jackson Hole symposium.

Related: All Eyes on Powell: The Three Scenarios for the Fed’s Speech and What They Mean for Crypto

On-Chain Data Shows a Divided Market

On-chain data indicates wallets holding 10–100 million XRP sold about 460 million tokens in the past week, contributing to a nearly 6% price decline. Meanwhile, smaller wallets with 1–10 million tokens accumulated 130 million XRP in the same period. This divergence underscores the mixed sentiment across different investor groups.

Institutional holdings have also weakened, with the largest wallets cutting exposure by almost 80%. Futures open interest fell from $10.9 billion to $7.5 billion, while the broader long/short ratio dipped below 1. The price has broken beneath both the 20-day and 50-day moving averages, forming a descending triangle pattern that could push the token toward $2.40 if confirmed.

XRP Forms Falling Wedge Pattern Ahead of Breakout

Despite the bearish sentiment from traders, the XRP price chart on the four-hour timeframe shows a clear “falling wedge” pattern. This is a bullish technical formation where the price moves between two downward-sloping, converging lines, often signaling a potential breakout to the upside.

At the time of the chart, XRP traded near $2.90, testing the lower boundary of the wedge. If the pattern confirms, the projected upside could reach nearly 78% above the current price, setting a target close to $5.20. This projection aligns with the upper resistance zone marked on the chart.

The 50-period Exponential Moving Average (EMA) sits around $3.02, slightly above the spot price. The price trading below this level reflects short-term weakness but also sets the stage for a bullish reversal once XRP breaks above it with strong momentum.

Related: Is XRP Ready to Bounce? A New Buy Signal and Falling BTC Dominance Suggest Yes

The Relative Strength Index (RSI) stands at 40.54, with its moving average at 38.56, placing XRP close to oversold conditions. This indicates weakening bearish momentum and leaves room for a potential upside recovery if buying pressure returns.

Meanwhile, volume data shows moderate activity, with recent declines suggesting consolidation. A surge in trading volume will be necessary to confirm any breakout from the wedge. Without increased participation, the price may continue to range within the pattern before a decisive move occurs.

Overall, the chart structure, the wedge formation, the EMA positioning, and RSI conditions combine to highlight a setup where XRP could stage a significant rally if the wedge confirms with volume support.

Wider Market Braces for Fed Guidance

Across the crypto market, risk sentiment remained fragile. Over $270 million in leveraged positions were liquidated this week, primarily in Bitcoin and Ethereum. Bitcoin hovered near $113,000, while Solana and Dogecoin also slipped.

The market now awaits Powell’s speech, which will outline the Fed’s stance on monetary policy. A hawkish tone could deepen the sell-off, while any dovish signal might ease pressure on risk assets, including XRP.