XRP price momentum appears to be fading, with bulls facing increased pressure to regain footing at the crucial $3 level or risk a deeper decline. The current market dynamics suggest weakening investor demand and deteriorating technical signals, casting uncertainty over the short-term outlook for Ripple’s native token.

After an impressive rally that saw XRP climb over 50% earlier this year, the price has begun to falter. Technical indicators show a loss of bullish momentum, which may be exacerbated by a notably low volume from the demand side. This combination increases the probability of a broader correction unless bulls manage to assert control and reclaim vital support levels.

One of the key challenges for XRP is the inability to hold on to the $3 area. This level has historically acted as a psychological and technical barrier. A failure to re-establish this zone as support may open the door for bearish forces to push prices lower, potentially targeting the next significant support near $2.70.

Moreover, recent market behavior shows XRP struggling to sustain upward rallies, often facing selling pressure near resistance levels. This trend suggests that short-term traders are taking profits rather than holding for extended gains, adding further selling volume to the market dynamics.

The weakening of the Relative Strength Index (RSI) and slowing Moving Average Convergence Divergence (MACD) oscillator reinforce bearish fears. If this technical stance persists, it may signal a bearish divergence, often a precursor to downtrends in the market.

However, it’s not all negative. There is still a pathway for bulls to regain control. Reclaiming the $3 benchmark with strong volume could revitalize positive sentiment and attract fresh buying interest. Such a move would signal resilience and potentially trigger a reversal in the current correction trend.

Analysts suggest watching for signs of demand returning near the lower support zones. A bounce from these levels, accompanied by increasing trade volume, may prompt a renewed uptrend. Still, this is contingent on broader crypto market conditions, which have recently been mixed across major assets.

Ripple’s ongoing legal battles and regulatory developments also contribute to XRP’s price volatility. The resolution of these issues, particularly concerning the SEC lawsuit, will likely have a significant impact on investor confidence and long-term price stability.

For those involved in XRP trading or holding the asset, caution remains prudent. Keeping an eye on critical levels such as $3 and $2.70, along with on-chain activity and macroeconomic indicators, can provide valuable insights for the next directional move. Until a significant shift occurs, XRP appears to be navigating turbulent waters, with bulls under pressure to regain control.

Related: XRP Price: $12M Max Pain for Bears

XRP bulls are struggling to hold critical support levels amid weakening momentum