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The price chart illustrates why expectations of a quick rally toward $3 are becoming more and more unrealistic as XRP has been unable to generate any significant momentum. XRP has been trapped below its main moving averages, particularly the 50 and 100 EMA, for weeks.
An increasingly narrow range has been created by this EMA squeeze, which frequently precedes a breakout. However, at this moment, the breakout could just as easily be downward. Daily candles are generating scant ranges and volume is drastically declining as volatility clings to multi-month lows.
This stability is crucial for XRP since, in the past, the token has required large spikes in liquidity and momentum to overcome resistance levels. Even modest upward targets seem ambitious when speculative capital is not flooding back into the market. Both bulls and bears are showing indecision and lack of conviction, as the Relative Strength Index (RSI) is lingering in neutral territory around 45.
As the 50, 100 and 200 EMAs are currently stacked overhead and serving as a ceiling XRP, would first need to break decisively above this dense cluster of resistances in order to have any realistic chance of approaching the $3 level once more. In the unlikely event that this squeeze develops into a breakout, the low volume indicates that the move may soon wane unless buyers intervene forcefully.
There is no assurance that it will launch higher, but this compressed volatility phase is frequently considered a spring-loading phase. The risk of a breakdown rather than a rally is actually increased by the lack of catalysts and waning market interest in altcoins.
There is no proof that XRP is currently drawing the kind of consistent buying power required to retest $3, even though technical setups like an EMA squeeze can precede reversals. It is unrealistic to anticipate a significant recovery until volume picks up and XRP is able to regain important moving averages. Before any real uptrend can reemerge, traders should brace themselves for more sideways drift or worse.
Vladislav Sopov
U.Today Editorial Team