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One of XRP's few bullish structures has just been invalidated, and the way it failed significantly worsens the outlook. The frequent rejection at the 50 EMA is the main problem. XRP made several unsuccessful attempts to reach that level.
XRP's reverse action
This type of pricing behavior indicates low demand. In a true recovery, the market pushes through short-term resistance and creates support above it without hesitation. XRP took the reverse action. After stalling and rejecting, it rolled over.
The short-term bullish setup that was developing through higher lows is essentially invalidated by that failure. The inability to break above the 50 EMA makes the ascending trendline weak support rather than a launchpad for further growth, even though it is still technically intact for the time being. This is more worrisome because of the larger context.
XRP not yet strong
With the 100 and 200 EMAs trending lower and serving as overhead pressure, XRP is still below all major moving averages. There is no way for momentum to change if the 50 EMA is not reclaimed. Rather, rallies are sold rather than prolonged, as the market remains in a bearish regime.
A collapse of the local support zone is currently the immediate threat. If the rising trendline falters, XRP will probably swiftly return to lower levels. In that case, the $1 level becomes a reasonable downside target, due to the lack of structural support between the current price and that psychological threshold, rather than speculation.
This is a time when investors' expectations need to change. Instead of exhibiting strength, the market is failing at resistance. Instead of reversing, that usually comes before continuing downward. The likelihood of XRP losing the $1 level rises dramatically if it is unable to recover the 50 EMA in the near future, and instead keeps making lower highs. At that point, the conversation moves from correction to a deeper continuation of the trend.
XRP is currently not stabilizing. It is weakening following an unsuccessful attempt at recovery, and the distinction is important.
U.Today Editorial Team
Dan Burgin
