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The next two daily candles may decide whether XRP maintains its midterm uptrend or enters a more severe correction as the token approaches a pivotal point on the chart. The technical situation is getting worse. XRP is currently testing its 50-day EMA support at $2.96 after grinding lower in price action.
Bearish sentiment prevails
During the recent rally, this moving average has served as a structural level, however, the current setup indicates that a breakdown is becoming more likely. The move might pave the way for a swift decline toward the $2.78-$2.70 range, where the 100-day EMA is the next line of defense if it is confirmed. Rapidly dropping volume is contributing to the bearish sentiment.
The lack of buying support suggests that market players are not making aggressive moves at the current levels. A sharp move frequently follows this volume decline because the price becomes more susceptible to abrupt sell orders as liquidity wanes. Any direction the market decides to go in could be amplified by a spike in trading activity, and momentum is currently favoring the downside.
Additionally, momentum indicators are indicating weakness. Bullish momentum has lost control of the trend, as indicated by the RSI's decline below 50. The oscillator might approach oversold levels if buyers do not intervene right away, which would support the bearish breakdown.
Why two-day window?
XRP is technically right at the threshold for a decision. A few more daily candles will either lock in a breakdown, which would trigger a slide toward lower supports or confirm a rebound in which the price cleanly bounces off the 50 EMA and reenters the $3.10-$3.20 zone. These kinds of setups usually settle in two to three candles, and considering XRP's position, a significant move is about to happen.
For the time being, holders of XRP have two options: defend the 50 EMA right away or risk momentum shifting against them and sending the token into a more severe retracement period. XRP's current bull structure may be put to the ultimate test over the course of the next 48 hours as momentum slips and volume dries up.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team