VWAPs Are Reliable—XRP Approaches Crucial Test at Monthly Support Level

XRP is currently retracing towards the bottom of a five-month trading corridor, but the broader trend still remains intact. This assessment is based on a daily chart analysis that covers the period from late December 2024 to early May 2025, showcasing XRP’s movement post-breakout from a descending trend line established from the peak on January 16, which approached $3.40.

XRP Is ‘Holding Steady’

The evaluation by the analyst focuses on three anchored Volume-Weighted Average Prices (VWAPs) that appear as adaptive bands on the chart. VWAP indicates the average price of an asset over a defined timeframe, adjusted for trading volume, effectively showing traders where most transactions have been executed.

Institutional trading operations frequently benchmark their execution quality against VWAP, making this line act as dynamic levels of support or resistance during price retests. When the starting point of the VWAP shifts—whether at the beginning of the month, quarter, or year—it provides insights into how supply and demand dynamics have developed during that specific timeframe.

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The cyan line represents the quarterly anchored VWAP, positioned at $2.2796, which had previously rejected price movements last week, triggering the current decline. The orange line corresponds to the monthly VWAP, now at $2.0574, with prices currently hovering just above this level; the analyst suggests that a positive rebound at this point could drive XRP back towards the mid-$2.20 range.

Furthermore, a green band illustrates the yearly anchored VWAP at $1.8731, alongside its standard deviation envelopes at $1.7863 and $1.6996. The capitulation wick observed on April 7 reached precisely the yearly mean before rebounding, highlighting its importance as a structural support level.

“The VWAPs continue to function effectively; the local low aligned with the yearly VWAP, the rejection from last week matched the quarterly VWAP, and now we are set to retest the monthly VWAP,” the analyst remarks.

The Crucial Support Area

Horizontal market movements provide significant insights as well. Since early December, XRP has traded within a range of approximately $1.94 to $2.05, indicated on the chart by a grey box along with six green arrows indicating previous price reactions. The analyst describes the current pullback as a necessary retest of this support level; only a definitive daily close below this zone would decisively alter the outlook to bearish.

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As it stands, XRP shows strength compared to other large market-cap altcoins that have failed to maintain similar ranges, despite its temporary weakness against an increasing Bitcoin dominance index. The analyst points out, “XRP continues to hold its range from December, which diverges from the performance of other significant coins that have seen declines. The Bitcoin dominance index is on the rise, reflecting Bitcoin’s supremacy in market flows,” they express.

Technical analysts will be observing two critical indicators in the upcoming sessions: whether buyers can uphold the $2.00 mark and whether the monthly VWAP can revert from being resistance to short-term support. A failure to maintain those levels could lead to a downward shift towards the yearly VWAP at around $1.87, while successfully defending these levels would support the notion that this broader consolidation is merely a pause in a continuing uptrend.

“I anticipate a reaction from this range low; breaching it would signal a turn into bearish territory, but for now, the chart appears healthy,” the analyst concludes.

At the time of writing, XRP was trading at $2.20.

Featured image created with AI tools; chart sourced from TradingView.com.