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With price action indicating weakness, XRP is currently perched on a precipice as it tests the lower limit of a symmetrical triangle formation. The asset is presently trading at about $2.87, which is just above the crucial support trendline that has supported its structure ever since the breakout in July. In the short term, there could be significant downside if this level is not maintained.
XRP needs breakthrough
On the daily chart, XRP keeps failing to break above resistance around $3.10-$3.20, indicating a tightening range. Simultaneously, the triangle’s lower boundary is being tested more frequently, which frequently indicates waning bullish momentum. XRP may retrace significantly if this support gives way. The immediate targets are located close to the 100 EMA, which is at $2.76, and possibly further toward the 200 EMA, which is at $2.50.
The idea that conviction in either direction is waning is further supported by the drop in volume. Since the triangle’s edge is so close, the next big breakout (or breakdown) looks likely to occur soon. This lack of trading activity frequently precedes a big move. After XRP’s spectacular summer rally above $3.50, the RSI near 44 confirms that market sentiment has cooled to a bearish incline. Selling pressure may worsen if the RSI continues to move into oversold territory.
Market remains divided
The market is still divided when viewed in a larger context. While bears cite declining liquidity and the inability to move above $3.20 as obvious indicators of exhaustion, bulls contend that XRP’s fundamentals and on-chain adoption keep it supported.
Finally, XRP is about to drop below a critical level. A bearish breakdown that could wipe out most of the asset’s recent gains is what the market should anticipate if the triangle’s lower border collapses. On the other hand, a recovery here would preserve the structure and provide bulls with another opportunity to advance higher. All eyes are currently on this vital support area.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team