XRP (XRP/USD) finds itself under significant pressure as the cryptocurrency continues to trade within a descending wedge pattern that has been developing over the past several weeks.
Currently priced around $2.30, XRP is testing a crucial horizontal support level that has held firm on multiple occasions, while facing persistent selling pressure from the pattern’s downward-sloping resistance line.
The descending wedge formation, characterized by lower highs connected by a declining trend line and a flat support base around $2.29-$2.30, typically suggests bearish sentiment is building among market participants.
This pattern indicates that sellers are becoming increasingly aggressive, offering their positions at progressively lower prices, while buyers have only been willing to step in at the same support level.
Should XRP break below the triangle’s horizontal support, the measured move target would project a decline toward the $1.80-$1.90 area, representing a potential drop equal to the triangle’s height.
However, the cryptocurrency has shown resilience at current levels, and a decisive break above the descending trend line resistance could invalidate the bearish setup and potentially trigger a short-squeeze rally.
Bearish Momentum Building
The moving average configuration on XRP’s chart presents a concerning picture for bulls. The 100-period simple moving average (blue line) has crossed below the 200-period SMA (red line), forming a bearish death cross that often signals the beginning of longer-term downtrends.
This bearish crossover occurred as XRP was consolidating in the middle of its current range, providing early warning of the weakness that has since materialized.
Currently, both moving averages are acting as dynamic resistance, with the 100 SMA positioned around $2.38 and the 200 SMA slightly higher at $2.42. These levels represent immediate overhead resistance that XRP will need to reclaim to shift the technical bias back to neutral. The gap between these indicators continues to widen, reflecting strengthening bearish momentum that could persist in the near term.
Price action has been consistently trading below both moving averages, indicating that the path of least resistance has shifted to the downside. Any rallies toward these dynamic resistance levels are likely to attract fresh selling interest, particularly if accompanied by weak volume or bearish reversal candlestick patterns.
Oversold Market Conditions
Momentum indicators are painting a mixed picture that suggests XRP may be approaching a potential inflection point. The stochastic oscillator has spent considerable time in oversold territory below the 20 level, indicating that selling pressure may be reaching exhaustion.
However, the oscillator has yet to generate a definitive bullish divergence signal, as recent price lows have been accompanied by corresponding lows in the momentum indicator.
The MACD histogram shows the momentum decline has been persistent, with the signal lines remaining in negative territory for an extended period. While the histogram bars appear to be shortening slightly, suggesting the pace of decline may be moderating, there has been no clear reversal signal generated yet.
