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XRP, one of the leading altcoins, has approached a horizontal support level, according to the most recent data.
Horizontal support is a pivotal concept in technical analysis. It is a price level where a majority of traders are expected to buy a certain asset (whether it's a cryptocurrency or a stock). Essentially, it acts as the price floor.
The price is currently approaching this critical floor (as shown by the red candlestick dipping into the gray box).
As reported by U.Today, a prominent trader recently noted that XRP was holding up better than other coins. However, this could change once the bulls lose the critical support level.
Failed price reversal
XRP experienced a rather strong uptrend from around October 23, with the price of XRP/USDT rising from the low $2.30s to a peak near $2.70 around October 27.
Following the peak, the price entered a downtrend and then consolidated before another sharp fall at the end of the chart.
The previous lows on October 23 and the low of the first major dip appear to have touched or come close to this level, which is why it has been flagged as a significant support zone.
The final red candlestick on the chart is shown aggressively breaking into the top of this support zone. This, of course, shows strong selling pressure.
If the support somehow manages to hold, strong buying pressure in this gray zone will likely cause the price to "bounce" back up.
However, if the selling pressure is too strong, and the price breaks clearly below the bottom of the gray box (below ~$2.30), the support would be considered broken.
As reported by U.Today, bearish pressure stemming from seasoned traders exiting the token appears to be the main headwind.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team