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The most recent price movement of XRP has put the token in a difficult technical position. The asset experienced severe profit-taking following an astounding July rally that brought prices near $3.60. As of right now, it is trading at about $3.21. The issue is that a recently formed descending trendline resistance that stretches from the late-July peak now hangs directly overhead.
This technical barrier could make it much more difficult to regain higher ground in the near future. Since XRP has already been rejected twice by this trendline, its significance as a temporary ceiling has been reaffirmed. The token faces additional pressure unless bulls can decisively break through it, especially now that momentum has begun to slow.
XRP's difficult position
Compared to the overbought levels we saw during the previous rally, the RSI, which is currently at 56, indicates a more neutral sentiment. Broadly speaking, XRP continues to hold a bullish structure with the 50-day EMA ($2.79) and 100-day EMA (~$2.46) below the 20-day EMA ($3.05), which is serving as immediate support.
These moving averages might close the gap if the price action stays erratic beneath the trendline, which could provide a strong foundation for the subsequent significant push. In the short term though that process might entail more sideways or marginally downward price movement. A strong close above the declining trendline (~$3.35) might restore momentum and pave the way for a move toward $3.60 and, if volume holds, $4.00.
XRP's new resistance
If the resistance is not broken, XRP may return to $3.05 or even $2.80, where the 50-day EMA may serve as a potent bounce zone. The consolidation phase that XRP is currently going through could either serve as a prelude to its next rally or signal the beginning of a more significant correction. In upcoming weeks, patient bulls might find better technical footing as the moving averages gradually rise, but for now, holding the $3 level has simply become much more difficult.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team