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Following indications of a recovery earlier in the week, XRP has gone back into bearish territory, wiping out most of its brief gains and escalating concerns about a more significant decline.
XRP slowing down
XRP experienced a significant reversal over the past day, plunging more than 2.5% and slipping below significant technical levels that had previously provided some hope of stability. As of press time, XRP is trading at about $2.1842, unable to hold above its short-term support level.
After a failed attempt at a recovery above $2.60, the bearish reversal occurred with growing selling pressure controlling the larger cryptocurrency market. That level of price rejection, which is close to the 50-day moving average (orange line), indicates that bears are getting ready for another leg down, and bulls are quickly losing control.
Selling volume is still significantly higher than buying activity, which indicates a lack of confidence among short-term traders, according to the volume profile. With the Relative Strength Index (RSI) currently trading close to 40, it indicates that momentum is still eroding without being sufficiently oversold to lead to a robust recovery.
XRP should welcome $1
In the event that the bearish continuation plays out as anticipated, XRP may experience a sharp decline toward $1.00, which in previous market cycles provided both technical and psychological support.
For the time being, traders ought to monitor three crucial levels. The immediate support level, which could hasten a decline if it is breached, is $2.20. A symbolic round-number level that might spark brief buying interest is $2.00. The ultimate downside target, if sentiment keeps getting worse, is $1.00.
XRP could only invalidate this bearish setup by regaining lost moving averages, reestablishing bullish structure and closing decisively above $2.70-$2.80. That does not seem likely right now, though, as risk appetite is waning and the larger cryptocurrency market is still brittle.
XRP’s trajectory will be pointing downward unless there is a significant change in momentum. With this reversal, a drop toward the $1.00 zone is no longer merely a remote possibility but is now becoming more likely.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team