Plasma, also known as XPL, is beginning to show early signs of recovery after enduring a difficult 2025 marked by persistent downside pressure. The digital asset has climbed more than forty percent from its all-time low, drawing renewed attention from traders and analysts as the New Year approaches. While the price remains well below its previous peaks, the recent move suggests that bearish momentum may be weakening and that a short-term recovery phase could be developing.
Market participants are now closely watching whether this rebound can evolve into a more sustained trend or whether it represents only a temporary relief rally. Technical indicators across multiple timeframes suggest improving structure and growing interest, although challenges remain ahead.
Early Rebound Signals Shift In Market Structure
The recent bounce from record lows has been accompanied by a noticeable stabilisation in market structure. After months of lower highs and lower lows, XPL has started to build a more constructive price pattern. This shift is important because prolonged downtrends often require a period of basing before any meaningful recovery can occur.
Trading activity over recent sessions indicates that sellers are no longer in full control. Buyers have stepped in consistently around the 0.12 level, which has now emerged as a key support zone. This base has allowed the price to reclaim higher levels and challenge areas that previously acted as resistance.
Although the broader trend over the year remains negative, the current structure points towards a potential transition phase. Such phases often attract speculative interest as traders position themselves early in anticipation of a stronger move.
Momentum Indicators Support Bullish Short-Term Bias
On the four-hour chart, momentum indicators continue to strengthen. The Relative Strength Index is trending higher and was recorded near 65 at the time of writing. This places XPL firmly within bullish momentum territory while still leaving room for further upside before conditions become overstretched.
Importantly, the RSI structure reflects trend strength rather than exhaustion. This suggests that the recent move is being supported by genuine buying pressure instead of short-lived speculation.
The Moving Average Convergence Divergence indicator reinforces this view. Bullish histogram bars continue to print and the shorter-term exponential moving average remains above the longer-term one. Together, these signals indicate that upside momentum is still active and has not yet begun to fade.
XPL/USD 4-Hour Chart | Credit:TradingView
This technical backdrop has enabled XPL to break above the 0.14 resistance level and reclaim the 0.15 area. Price is now consolidating just below a more significant barrier near 0.17, which is likely to determine the next directional move.
Key Resistance Zones And Price Targets Ahead
Structurally, the area around 0.17 stands out as a major hurdle. This level aligns with previous supply zones where selling pressure was concentrated before the earlier breakdown. A clean break and sustained hold above this region would significantly strengthen the bullish case.
If buyers manage to overcome this resistance, the next potential targets lie between 0.18 and 0.20. These levels represent areas where price previously struggled and could again attract profit-taking. However, a successful move into this range would confirm that the recovery is gaining traction.
On the downside, any rejection from current levels could lead to a retest of support near 0.15. As long as this zone holds, the broader recovery structure would remain intact. A loss of this level would weaken the short-term outlook and reopen the possibility of renewed downside pressure.
Rising Open Interest Signals Fresh Market Participation
Derivatives data adds another supportive layer to the current narrative. Open Interest has risen by around eleven percent over the past twenty-four hours alongside the price increase. This combination is often interpreted as fresh capital entering the market rather than traders closing existing positions.
Rising Open Interest during price appreciation typically points to new positioning and growing confidence among participants. It suggests that traders are willing to commit capital in anticipation of further gains rather than merely reacting to short-term volatility.
If this trend in Open Interest continues, it could help sustain momentum in the near term. However, sudden spikes in leveraged positions can also increase the risk of sharp pullbacks if sentiment shifts quickly.
Daily Chart Confirms Breakout And Capital Inflows
Looking at the daily timeframe, XPL has confirmed a breakout from a falling wedge pattern. This type of breakout is often associated with trend reversals and is supported here by multiple consecutive green candles.
Capital inflows appear strong with the Money Flow Index currently elevated above 80. This indicates heavy buying interest, though such high readings can also precede short-term consolidation or pullbacks. A period of sideways movement would not necessarily invalidate the bullish structure.
XPL/USD Daily Chart | Credit: TradingView
Bull Bear Power remains positive and continues to print green bars. This shows that buyers are still dominating directional momentum and that the breakout has not yet been challenged.
Fibonacci retracement levels provide additional clarity. Trading near 0.16 XPL is approaching the 0.618 level around 0.17. A decisive move above this mark could open the path towards 0.21, while failure may lead to a pullback towards 0.15.
