XRP Struggles in Descending Channel — Could Remain Stuck Below $3 Resistance

Key Takeaways

• Despite showing strength, XRP has failed to sustain a breakout above $3 due to strong resistance.
• The shift from a bullish pennant to a descending channel indicates persistent low buying pressure.
• XRP has maintained $2.00 as support, but the altcoin might struggle to prevent another decline.
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Since dropping below $3 earlier this month, XRP’s attempts to reclaim the level have been unsuccessful. However, in the past 24 hours, the altcoin has shown renewed strength, suggesting another push toward the price.

Despite this occasional price increase, strong resistance restricts the token, preventing a sustained breakout.

Here is how XRP price might fare as it struggles to overcome this bearish structure.

XRP Fades From Bullish Technical Structure

Late last year, XRP formed a bullish pennant on the daily chart. The pennant, which came with a sustained rally and brief consolidation, drove XRP’s price above $3.30.

During that period, speculation spread that the token could reach a new all-time high. However, the move was invalidated.

This invalidation happened as a result of lower demand for the cryptocurrency. As a result, the technical setup changed from a bullish pattern to a descending channel.

A descending channel is a pattern that indicates a sustained downtrend. It forms when two parallel trendlines connect a series of lower highs and lower lows, indicating consistent selling pressure.

As it stands, XRP’s price has held the $2 support to prevent another correction. The chart below also shows that it could be in line to test the upper resistance level at $2.54.

The Chaikin Money Flow (CMF) failed to sustain the rising reading. This decline indicates dwindling buying pressure.

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If sustained, this could halt XRP’s recent uptrend, and the price might struggle to retest the $3 mark.

XRP Price Outlook: Further Rally Unlikely

Looking at the price action from the 4-hour timeframe, CCN noticed that XRP could face resistance as it tries to hit higher levels. One indicator supporting this outlook is the Parabolic Stop And Reverse (SAR) indicator.

When the dots of the Parabolic SAR are below the price, it indicates support. In that situation, the price can increase. But since it is the other way around, XRP could struggle to climb significantly higher.

Signals from the Moving Average Convergence Divergence (MACD) also seem to agree with this bias. As of this writing, the MACD reading hovers near the zero line, indicating that momentum is not bullish.

Should this remain the same, XRP’s price could drop to $2.13 at the 0.382 Fibonacci retracement level. Failure to hold this line could lead to another correction.

In that case, the altcoin might slide to $1.98. However, the CMF reading might reverse to the positive region if buying pressure increases.

If that happens, XRP might climb toward $3.42 quickly.