XRP Bear Trend Signals Further Drop

What to Know:

• XRP is in a corrective phase against both USD and BTC, testing the durability of its early-January rebound.
• Broader market trends and technical indicators suggest a bearish bias, with key resistance levels holding firm.
• The ability of XRP to hold critical support levels will determine its potential for establishing a new trading range or facing further declines.

XRP’s recent attempts to rally have been met with resistance, leaving the cryptocurrency at a crucial juncture. As it navigates a corrective phase against both the US dollar and Bitcoin, the question is whether the early-January upswing was merely a fleeting short-covering event or the foundation for a more sustained recovery. Technical analysis reveals key levels that will likely dictate XRP’s next move.

XRP/USDT: Testing Key Support

The XRP/USDT pair is currently trading just above the $1.80–$1.90 demand zone after facing rejection at the $2.40 resistance band. This area also coincides with the declining 100-day and 200-day moving averages. These moving averages signal a medium-term bearish outlook. The daily Relative Strength Index (RSI) has retreated from overbought conditions, aligning with the fading momentum of the recent bounce.

For a potential basing range to develop, the $1.80–$1.90 support must hold. Overcoming the $2.20–$2.40 resistance is essential to indicate a possible trend reversal. Conversely, a decisive break below $1.80 could pave the way for a descent toward the October lows around $1.60, with further weakness potentially targeting the $1.20–$1.30 range.

XRP/BTC: Stuck in a Downtrend

Against Bitcoin, the XRP/BTC pair is consolidating around the 2,100–2,200 sats level after being rejected from the 2,400 sats resistance band and the cluster of the 100-day and 200-day moving averages. The pair remains entrenched in a structural downtrend, with rallies toward the 2,400–2,500 sats area consistently met with selling pressure.

Immediate support lies around 1,900–2,000 sats, where a recent downside wick suggests some buying interest. However, a sustained recovery requires reclaiming the 2,400–2,500 sats region and the key moving averages. A breakdown below 1,800 sats would signal renewed underperformance, potentially leading to a slide toward the 1,500 sats level.

Market Structure and Liquidity

XRP’s price action is heavily influenced by overall market sentiment and liquidity conditions within the cryptocurrency space. Bitcoin’s performance, in particular, plays a crucial role, as it often sets the tone for altcoins like XRP. Any positive developments, such as increased institutional adoption or regulatory clarity, could provide a boost to XRP and the broader market. Conversely, negative news or market corrections could exacerbate XRP’s downside risks.

Ripple’s Developments and XRP

Developments surrounding Ripple, the company associated with XRP, continue to impact the token’s market dynamics. Legal updates, partnerships, and technological advancements can all influence investor sentiment and trading activity. Monitoring these factors provides additional insight into the potential drivers of XRP’s price movements.

Conclusion

XRP is at a critical juncture, with its ability to hold key support levels determining its short-term trajectory. While the broader market context and technical indicators suggest caution, positive developments related to Ripple or improvements in overall crypto sentiment could alter the outlook. Traders and investors should closely monitor these factors to assess XRP’s potential for recovery or further decline.

Related: XRP Interoperability Signals Cross-Chain Scaling

Source: Original article