XRP Price Breakdown Deepens With Bears in Full Control — Rebound Not Close

Key Takeaways

• On the 4-hour chart, XRP is trapped in a descending channel with strong resistance at $2.48.
• The CMF is at -0.17, indicating dominant selling pressure, but XRP has not hit oversold levels yet.
• A bullish reversal is only likely if XRP’s price can break above the 0.618 Fibonacci level.

After previously outperforming much of the market, XRP now appears to be a shadow of its former self.

At the time of writing, the altcoin was trading at $2.18, dropping 11.07% over the past week.

This decline indicates a shift in momentum, as bullish control has faded and bears have taken the reins. With downward pressure mounting, XRP’s price may struggle to reclaim $3 anytime soon.

Here is what could be next for the once-resilient altcoin?

XRP Bulls on the Sidelines

On the 4-hour chart, XRP’s price is trading within a descending channel. This bearish descending channel has ensured that the altcoin has been unable to break above the resistance levels at $2.48 and $2.62.

In line with this thesis, CCN looked at the Chaikin Money Flow (CMF). The CMF is a volume-based indicator that helps traders assess the buying and selling pressure behind a price movement over a set period of time, usually 21 days.

The CMF is a key indicator of market sentiment. When the CMF is above the zero line, it signals buying pressure.

On the other hand, when it is below the line suggests selling pressure is in control.

At press time, XRP’s daily chart shows the CMF sitting at -0.17, firmly in bearish territory. If this reading persists, it increases the likelihood of a continued decline in XRP’s price unless the market hits an oversold condition.

Typically, the CMF is considered oversold around -0.20, but with the current reading still above that threshold, XRP may not be ready for a meaningful rebound.

In the short term, this could translate to more sideways movement, or even a drop below the $2 mark.

XRP Price Analysis: Lower Lows

Analysis of the daily chart also presents a similar thesis. According to the image below, the Awesome Oscillator (AO) has dropped to the negative zone.

The AO measures momentum by comparing recent price movement with historic movement. When the indicator’s rating is above the zero line, momentum is bullish.

Since it is the other way around, the momentum around XRP is bearish. Like the AO, the Parabolic Stop And Reverse (SAR) shows that XRP’s price could struggle to break the overhead resistance.

Technically, when the dots of the Parabolic SAR are below the price, it indicates support. But in this case, the dots are above the altcoin’s value.

Besides that, XRP has dropped below the key support at $2.27. Should the token fail to reclaim this level, the next target could be a decline to $1.92.

If bearish pressure intensifies, XRP’s price might fall to $1.57.

On the flip side, if XRP breaks above the 0.618 golden pocket ratio, this trend might change. In that situation, the cryptocurrency’s price might climb in the $3 direction.