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XRP Loses 7% From Local High, Here's What Can Save It

Mon, 04/17/2023 - 12:46
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Arman Shirinyan
XRP is gradually losing its value following strong performance in past, but it may be natural
XRP Loses 7% From Local High, Here's What Can Save It
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XRP has recently lost its footing around its local high of $0.58 and has experienced a decline of approximately 7% in value over the past few days. This development portrays XRP as a potentially weak asset that may face further challenges in sustaining its current rally, possibly resulting in the loss of its underlying support.

As of now, no critical events have occurred, and XRP continues to maintain its position at the 21-day exponential moving average (EMA), suggesting that the asset is still in an uptrend. However, there are several factors that could negatively affect XRP's performance.

XRP chart
Source: TradingView

One of these factors is the decreasing trading volume, which indicates a reduced level of interest from traders and investors in the asset. A diminishing trading volume can negatively impact XRP as it leads to lower liquidity, making it more susceptible to price fluctuations and heightened volatility. Moreover, when trading volume is low, it becomes challenging for the asset to maintain its current price levels, potentially leading to further declines.

Another concerning aspect is the diverging moving averages. As the shorter-term moving averages continue to widen from the longer-term moving averages, it could imply that the momentum behind the asset's price movement is waning. This situation may suggest that the ongoing uptrend is losing steam, potentially leading to a trend reversal and further price declines.

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If XRP manages to find strong support at a crucial level, such as the 21-day EMA or a historic support level, it could encourage buyers to step in and push the price higher. A break above significant resistance levels or the formation of bullish chart patterns could also signal a potential price reversal. A surge in trading volume could also help counter the current decline in interest and liquidity, providing the necessary momentum for a price reversal.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.