- XRP price has continued to break down as cautious sentiment prevails.
- The price of XRP has positive fundamentals to anchor the next positive retracement.
The price of Ripple’s associated XRP has reversed to $2.40 after recently breaking above a crucial descending trendline. Toward the end of last year, traders were expecting a big rally toward a new all-time high.
However, the altcoin’s latest performance suggests it is losing momentum rather than gaining it. Here are the three key factors causing the sudden slowdown and the potential implications for the market.
Reduced Buying Pressure
XRP’s rally failed to continue its upward momentum despite breaking past the bearish trendline. This shows the absence of sustained buying pressure in the market required to maintain the growth.
In the meantime, XRP has failed to close firmly above $2.50, undermining bullish sentiment. XRP is now more susceptible to selling pressure as traders and investors exercise more caution. They fear XRP prices may decline further, highlighting the bearish sentiment in the market.
XRP’s reduced buying pressure is indicated by its declining trading volume. In the last 24 hours, the trading volume declined by 27.3% to $6.67 billion. The price is down by 4.94% to $2.38 per data from Marketcap.
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XRP Price Faces Major Resistance
As XRP struggles against selling pressure, it encounters a key resistance at $2.6, impeding its upward momentum. This resistance and the decline in volume suggest that traders are hesitant to boost the price without stronger catalysts.
The $2.30 level, which coincides with the 50 EMA, is an important support region to monitor on the downside. XRP might retest lower support levels around $1.20 or $1.69 if it fails to overcome this barrier.
Moreover, the market remains uncertain, as indicated by the Relative Strength Index (RSI), currently showing neutrality at roughly 57. If selling pressure continues, and the market remains cautious generally, XRP may lose more ground.
However, a strong rebound from the $2.30 support level might rekindle optimism and provide an opportunity for another breakout attempt.
Traders Exhibit Cautious Sentiments
The declining momentum in the XRP market is also triggered by the current underperformance in the broader crypto market. Traders have locked in gains from recent rallies, particularly on assets like XRP that have already produced sizable profits.
The restriction in capital inflow into XRP has further decreased risk appetite, impeding the price growth of the cryptocurrency. XRP’s future performance is likely hinged on the asset’s ability to attract new buyers and the state of the market as a whole.
To determine XRP’s next move, traders are advised to monitor important support and resistance levels closely.
On the upside, regulatory optimism, Ripple’s courtroom gains, and XRP’s technical breakout create a favorable environment for the asset to reach its $4 target. Per a CNF report, market analyst World of Charts predicts that XRP could reach this level within days.
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