Ripple and Stellar outlook: XRP and XLM recovery continues as bearish momentum wanes

• Gains in XRP continue on Thursday, with the token trading above $1.30 following a close above the falling channel’s upper trendline.
• With the next major resistance at $0.173 in sight, XLM is trading above $0.168.
• Further recovery remains possible for both altcoins, supported by better derivatives metrics and a modest pick-up in momentum.

Easing bearish pressure is helping Ripple (XRP) and Stellar (XLM) build on their recovery on Thursday. A breakout above the upper trendline of a falling channel has taken XRP above $1.30, while XLM remains above $0.168 as it nears resistance at $0.173. Better derivatives metrics, alongside firmer momentum indicators, suggest that the recovery could have further to run.

Are derivatives metrics turning more supportive?

Conditions in the derivatives market have improved slightly for Ripple and Stellar. As the CoinGlass chart below illustrates, funding rates for both altcoins turned positive on 30 October before climbing to 0.0093% for XRP and 0.0084% for XLM on Thursday. With long position holders paying short position holders, these positive readings point to a mildly bullish outlook.

The picture is less supportive for XRP’s long-to-short ratio, however. CoinGlass data puts the reading at 0.85 on Thursday, still in negative territory. A ratio below one signals bearish sentiment, with traders positioning for lower asset prices, thereby limiting XRP’s recovery potential.

By contrast, XLM’s long-to-short ratio moved into positive territory at 1.05 on Thursday, signalling a modestly bullish outlook.

XRP technical outlook: Can the mildly constructive bias hold?

A close above the falling channel’s upper trendline keeps XRP’s bias mildly constructive as it trades at $1.308 on Thursday. Nevertheless, key Exponential Moving Averages (EMAs) continue to restrict the upside. Overhead resistance lies at the 100-day EMA of $1.323, the 50-day EMA of $1.335 and the 200-day EMA of $1.378, indicating that the pair remains constrained despite a slight improvement in momentum. 

At 48, the Relative Strength Index (RSI) is close to neutral. The Moving Average Convergence Divergence (MACD), meanwhile, has registered a positive crossover, with its line marginally above zero. This suggests that downside pressure is easing, although the dominant overhead resistance structure has yet to be overcome.

Immediate downside support lies near $1.265 at the previously breached upper trendline. Should a daily close fall below this level, deeper support at $1.160 and $1.000 would come into view.

The first upside hurdle is the 100-day EMA at $1.323, followed by the 50-day EMA at $1.335 and the 200-day EMA at $1.378. Only a sustained advance above these moving averages would reduce the bearish bias and clear a path towards the next horizontal resistance levels of $1.540 and $1.900.

XLM technical outlook: Are sellers losing strength?

Trading at $0.169 on Thursday, XLM continues to face pressure beneath its 50-day, 100-day and 200-day EMAs, which stand at $0.182, $0.184 and $0.191, respectively. Together, these averages limit upside potential and keep the near-term bias bearish.

Demand remains subdued, as reflected in the Relative Strength Index (RSI) reading of around 42. Although the Moving Average Convergence Divergence (MACD) has edged into positive territory, it signals an easing rather than a reversal of bearish momentum while the price remains below these key averages.

For an advance, the first hurdle is horizontal resistance near $0.173. Beyond that lie the 50-day EMA at $0.182, the 100-day EMA at $0.184 and then the 200-day EMA at $0.191. Further out, $0.234 represents a stronger supply zone should buyers regain control.

The next significant downside support lies around the horizontal level of $0.153. Despite the improvement in the MACD, a break below this level would likely leave the pair vulnerable to a deeper correction.

(An AI tool assisted in preparing the technical analysis in this article. Learn more.)