Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.
The validity of XRP’s breakout is questioned due to its recent price action. Expectations of a confirmed uptrend were sparked when XRP momentarily crossed above the descending resistance line on the daily chart, which was located around $3.10. Many traders questioned whether this was a real breakout or a bull trap, because the rally was short-lived and the price had already fallen back below $3.08.
Price analysis
Despite its efforts to overcome resistance, the structure indicates that XRP is still vulnerable. The $3.00-$3.10 range is turning out to be a crucial area of conflict. A persistent close above $3.10 might pave the way for a retest of the annual highs and open the way toward $3.40. Conversely, if this area is not regained, support levels at the orange EMA line ($2.81) and the 200-day moving average ($2.50) would once again be relevant. Since the RSI is close to neutral, it appears that momentum is not clearly in favor of bulls.
This uncertainty is increased by on-chain data. Between Sept. 12 and two days later, the number of transactions executed fell precipitously from over 11.7 million to much lower levels. A bearish indication that casts doubt on the bullish breakout story, this decline indicates waning activity on XRP Ledger. Strong rallies are usually followed by high activity, so declining transactions during a breakout attempt indicate weakened network participant conviction.
XRP movement scenarios
Bullish scenario: The asset may confirm the breakout and move toward $3.40 and higher if XRP swiftly recovers $3.10 and closes above it with increasing volume. This move would require a spike in on-chain activity.
Bearish scenario: As bears regain control, the breakout will be verified as fraudulent if XRP is unable to recover $3.10. It’s likely that the price will drop toward $2.81 or even $2.50, particularly if on-chain activity keeps dropping.
XRP is currently at a turning point. Whether the breakout materializes or fades into another failed attempt will be determined by the next few daily closes. For confirmation, traders should keep a close eye on the on-chain activity trend as well as the $3.10 resistance.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team