After breaking below the important dynamic support of the 200-day moving average, Ripple’s price entered a consolidation phase, retracing to test the MA and complete a pullback.
If this pullback is successful, there is a high chance of further price depreciation for XRP in the short term.
By Shayan
Analyzing the daily chart, we can see a strong downtrend followed by an extended period of consolidation, causing the price to fall below the critical 200-day MA. During this phase, uncertainty and fear gripped the market, resulting in increased selling pressure and ultimately breaking the mentioned moving average.
The 200-day MA is widely recognized as a strong level of resistance, and the price falling below it confirms the prevailing bearish sentiment, suggesting the potential for further downward movement. It is important to note that this scenario depends on a successful upward pullback that validates the breakout.
With a small upward retracement currently occurring, potentially completing a pullback towards the breached MA, the overall outlook for Ripple appears strongly bearish. The next likely target is the critical support zone at $0.42. However, this scenario remains valid only if the pullback unfolds successfully and the price fails to reclaim the 200-day MA.
Turning our attention to the 4-hour chart, we can observe a well-defined multi-month downtrend in Ripple’s price. This downtrend is characterized by the consistent formation of lower highs and lower lows. These lower price swings highlight the strength of the downtrend.
However, there has been a significant development as the price has broken above the trendline, experienced a pullback, and shown a slight upward trend.
This price action has temporarily shifted the market trend and brought XRP closer to the static resistance region of $0.55. This sets the stage for a potential retest of this crucial barrier. If the price is rejected around this important range and starts to decline, the pullback would be considered complete, possibly indicating another bearish movement.
On the other hand, if buyers successfully push the price above this critical threshold and maintain upward momentum, the scenario could shift to a bullish one. This could lead to a surge aiming to break through the price range between the 0.5 ($0.6386) and 0.618 ($0.6896) levels of the Fibonacci retracement.
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Cryptocurrency charts by TradingView.
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