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Major XRP Crisis, Arbitrum (ARB) Faces Large Correction, Candle of Hope Appears on Cardano (ADA)

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Mon, 22/01/2024 - 0:30
Major XRP Crisis, Arbitrum (ARB) Faces Large Correction, Candle of Hope Appears on Cardano (ADA)
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The XRP market is facing a noisy phase as critical technical indicators point to a potentially deepening crisis. A close analysis of the XRP price chart reveals a significant breakdown below the 200-day EMA, a bearish signal that could presage a further descent in price.

This breakdown is accompanied by what appears to be an impending bearish EMA cross, where the shorter-term moving average is poised to cross below the longer-term average. Such a crossover would likely confirm the dominance of bearish momentum, enhancing the risk of continued decline for XRP.

XRPUSDT
XRP/USDT chart by TradingView

Adding to the concerning technical setup is the descending volume amid the downtrend. Typically, descending volume can suggest a lack of conviction in the downtrend, but it can also indicate that a significant price drop has not attracted new buying interest, potentially leading to a more protracted bear market.

Focusing on specific price levels, XRP currently faces a clear resistance level at approximately $0.66, which it needs to breach to alter the current bearish narrative. On the downside, the support level to watch is around $0.42, a breach of which could significantly undermine market confidence and lead to accelerated selling pressure.

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For a reversal scenario, bulls would need to push the price back above the 200-day EMA and initiate a bullish EMA cross to flip the script. A significant increase in buying volume, potentially triggered by positive developments in Ripple’s ongoing legal challenges or adoption news, could help to catalyze such a reversal.

Arbitrum backs down again

The cryptocurrency market is witnessing a substantial price correction for Arbitrum (ARB), the native token of the biggest Layer-2 scaling solution for Ethereum.

ARB's chart illustrates a notable retracement from its recent highs, signaling a bearish reversal pattern that could potentially extend further. The asset has rapidly lost value, which might be symptomatic of the current sentiment toward Ethereum and its associated L2 solutions, as the market sees a resurgence in interest toward ecosystems like Solana, known for its high throughput and lower transaction costs.

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The chart analysis reveals a critical local support level at approximately $1, a threshold that is crucial for ARB to maintain to prevent further slides. On the upside, the resistance to watch is around the $1.8 mark, which previously capped upward movements and may continue to pose a barrier to recovery.

For a reversal scenario in the foreseeable future, ARB would need to reclaim and consolidate above the $1.05 support, possibly driven by enhanced user adoption or technological milestones within the Arbitrum ecosystem that could reignite interest and confidence.

Cardano shows some hope

Cardano has recently kindled a flame of optimism on the chart. On Jan. 19, a "candle of hope" was lit as ADA witnessed a sharp reversal from the 100-day moving average.

This reversal candle represents not just a temporary reprieve but a potential shift in market sentiment. While the midterm trend has been bearish, the decreasing volume accompanying the downward price action suggests that the selling pressure is weakening.

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Zooming into specific levels, ADA has found robust support at approximately $0.4126, a line that has historically been defended by bulls and could serve as a springboard for a possible recovery. On the flip side, the asset faces immediate resistance at $0.5591. This level has been a stubborn barrier to upward movements and needs to be convincingly broken for ADA to regain its bullish momentum.

For a bullish reversal scenario to materialize, ADA will need to build on the momentum of the "candle of hope" and push through the resistance, ideally with increasing volume to validate the move. A sustained break above this level could attract sidelined investors back into the market, further bolstering the recovery.

Moreover, if the broader market conditions stabilize and positive developments continue within the Cardano network, such as advancements in scalability or new partnerships, these could serve as catalysts for a reversal from the current downtrend.

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