XRP (XRP/USD) has been under significant selling pressure, recently breaking below the lower boundary of its ascending channel and now testing key Fibonacci support levels.
Currently trading at $2.16372, the cryptocurrency is at a crucial juncture that could determine its trajectory in the coming weeks.
The recent price action shows XRP has completed a bearish breakdown from an ascending channel that had guided its movement since late April. This breakdown signals a potential shift in the near-term trend from bullish to bearish, with prices now seeking stability at key Fibonacci retracement levels.
XRP Fibonacci Targets
The Fibonacci extension drawn from the swing low to the recent high near $2.35551 reveals several critical support zones. XRP is currently hovering just above the 38.2% Fibonacci level at $2.16421, which appears to be providing tentative support.
Should this level fail to hold, the next significant support lies at the 50% retracement level of $2.13601, followed by the psychologically important $2.10 level, which closely aligns with the 61.8% Fibonacci retracement at $2.10780.
The breakdown from the ascending channel suggests a shift in market structure, with the upper boundary of the previously broken channel potentially serving as resistance on any recovery attempts. This resistance sits around the $2.22-$2.23 zone, coinciding with previous price congestion areas.
XRP Technical Analysis
Both the 100 SMA and 200 SMA are positioned above the current price, with the 100 SMA below the 200 SMA in a bearish alignment. The 100 SMA is currently near $2.23, while the 200 SMA sits around $2.24, creating a significant resistance cluster that could cap upward movements in the near term. The fact that XRP is trading below both these moving averages reinforces the bearish bias in the current market structure.
The stochastic oscillator provides some hope for XRP bulls, as it’s moving upward from near oversold territory. This suggests a potential recovery in momentum that could support a price bounce in the short term. The oscillator has not yet reached overbought conditions, potentially allowing for some upward movement before resistance is encountered.
Meanwhile, the MACD indicator in the middle panel shows decreasing bearish momentum, with the histogram bars becoming smaller. However, both lines remain below the zero level, indicating that bears still control the overall picture despite the slowing downside pressure.
From a pattern perspective, the recent price action could be forming a descending wedge or a falling channel, both of which can potentially lead to bullish reversals if certain conditions are met. Traders should watch for any signs of bullish divergence on the stochastic and MACD indicators, as well as a potential break above the upper boundary of any emerging falling pattern.
The broader cryptocurrency market sentiment will likely influence XRP’s next move, as traders appear to be disappointed by the SEC decision to punt an earlier plan to launch XRP futures-based ETFs early this month.
