XRP Price May Dip Below $2: Analysis and Insights
The recent price action for XRP has exhibited limited strength as the cryptocurrency contends with sustained bearish pressure. Since initiating its correction phase on May 12, XRP has formed a pattern of consecutive lower highs on the daily timeframe, retreating notably from its May peak of $2.65. This ongoing decline follows a significant rally that emerged in April, which saw XRP rebound from a low of $1.80 early in the month.
The Scenario Since the Rally
After touching a low of $1.80 in early April, XRP experienced a vigorous rally that peaked at $2.65 in mid-May. This surge was driven by various factors, including positive sentiment surrounding the cryptocurrency market and heightened interest in XRP particularly following its legal battles with the SEC. However, since May 12, the momentum that fueled this rise has waned, leading to a discernible series of red candles on XRP’s price chart.
Technical Analysis: Short-Term Bearish Sentiment
Recent technical assessments by analyst MasterAnanda on TradingView have reinforced a prevailing bearish sentiment toward XRP. The analyst documented a breakdown from a rising channel structure, highlighted by three consecutive daily closes below the lower trendline. This breakdown is a critical indicator that the bullish momentum may have significantly weakened.
“It looks like XRPUSDT can recover any minute now, but the correction might not be over,” MasterAnanda noted, emphasizing the potential for further declines.
Notably, these three consecutive red days have effectively dismissed the potential for an upward bounce from the lower trendline, indicating that market participants may be sceptical about a quick recovery. As XRP trades below the $2.30 mark, the likelihood of a steeper decline grows increasingly pertinent.
Market Dynamics: Low Bearish Volume
Interestingly, despite XRP’s ongoing downturn, the bearish volume accompanying this price movement has been relatively low. This suggests that the current selling pressure may not be particularly aggressive, indicating that the market’s slide is more a function of a dwindling buyer presence rather than a wave of strong selling. The low-volume pullback shows a lack of enthusiasm among buyers rather than being strongly challenged by sellers.
Long-Term Outlook: Potential for Recovery
Despite the short-term bearish indicators, MasterAnanda maintains an optimistic view of XRP’s long-term trajectory. Technical analysis using Fibonacci retracement levels reveals that XRP has already dipped below the 0.382 retracement level and is currently hovering near the 0.236 line at approximately $2.035. Below this threshold lies a critical support area between $1.70 and $1.80, where the analyst indicates a potential rebound may occur.
If XRP fails to hold above the $2.00 milestone, a further slip towards the projected support range at $1.75 becomes plausible. The daily candlestick chart illustrates this potential trajectory, with a red arrow signifying the expected decline.
Upcoming Resistance Levels
- Resistance Level 1: $2.30 – A crucial threshold to watch for a possible rebound.
- Resistance Level 2: $2.50 – The upper limit of the previously established range.
- Resistance Level 3: $2.65 – The May peak that now poses a psychological barrier.
Potential Risks for Traders
With XRP facing increasing adverse sentiment, traders should prepare for the possibility of a marked downside unless a strong reversal materializes prior to breaching the $2 support level. The bearish sentiment appears to be gathering momentum, and failing to uphold the $2 mark could expedite a retest of the $1.70 to $1.80 range sooner than anticipated.
As of the last update, XRP is trading at approximately $2.13, representing a decline of 3.85% over the past 24 hours and 8.9% over the past week. Investors and traders should remain vigilant, considering both short-term technical indicators and long-term market fundamentals.
In conclusion, the landscape for XRP presents both challenges and opportunities. While short-term analysis suggests possible further declines, long-term projections remain cautiously optimistic. Market participants should analyze both technical signals and broader market trends to navigate the current volatility effectively.
Source: newsbtc