XRP Bearish Signal Reveals Big Trouble

What to Know:

• XRP is trading near $2, facing potential downside pressure as a bearish EMA ribbon pattern reappears on its 3-day chart, historically signaling prolonged declines.
• The broader crypto market sees mixed signals, with ongoing ETF inflows contrasting with technical indicators suggesting possible bearish trends for XRP.
• XRP’s ability to maintain support above $1.90 is crucial, as a failure to hold could lead to further price drops, impacting liquidity and investor confidence.

XRP is currently trading around $2, navigating a landscape of technical challenges and market uncertainties. Over the past week, XRP has experienced a slight dip, and analysts are pointing to historical patterns that suggest further downside risk. Despite these bearish signals, activity from large accounts and steady ETF inflows offer a contrasting narrative, highlighting the complexities influencing XRP’s market position.

Historical Bearish Pattern Returns

A recurring bearish pattern has emerged on XRP’s 3-day chart, as identified by market analyst Steph Is Crypto. This pattern involves the EMA ribbon flipping to a bearish setup, which has historically preceded significant downward phases for XRP. Previous declines associated with this pattern have ranged from 27% to 66%, often unfolding over several months. The reappearance of this signal raises concerns about a potential extended period of downside for XRP.

Sideways Range Holds Structure

ChartNerd points out that XRP remains within a 13-month trading range, bounded by support near $2 and resistance just above $3. As long as XRP stays within this range, the broader market structure remains unchanged. The current price action is viewed as part of an extended sideways phase, lacking a clear directional commitment from the market.

Critical Support Level

Analyst Ali Martinez highlights the importance of the $1.90 level for XRP. According to Martinez, maintaining this level is crucial for XRP to target $2.50; failure to hold above $1.90 could invite further selling pressure, exacerbating the potential for a bearish trend.

Whales Active as ETF Demand Builds

Recent data indicates increased trading activity from large accounts, even as XRP trades near yearly lows. This uptick in activity, particularly in taker volume demand, is often observed during bottoming periods, suggesting strategic accumulation by larger players. Concurrently, U.S.-listed XRP spot ETFs have witnessed consistent interest, recording 30 days of net inflows since their launch on November 13. These ETFs have amassed approximately $1.18 billion in total net assets, with around $991 million in net inflows, signaling sustained institutional interest despite broader market fluctuations.

The confluence of technical bearish signals and ongoing institutional interest presents a mixed outlook for XRP. The coming weeks will be crucial in determining whether XRP can defy historical patterns and maintain its support levels, or if it will succumb to renewed downward pressure.

Related: XRP, Bitcoin Target Price Forecasts

Source: Original article