The price of Ripple’s XRP has been facing challenges in breaking through a crucial horizontal resistance level and has since entered a short-term bearish pattern. Both long-term and short-term time frames indicate a possibility of further downside movement before a potential bullish trend reversal.
Long-Term Support and Breakdown Risk
XRP has been trading below the $0.53 horizontal resistance area since May 2022, with three unsuccessful breakout attempts. The most recent attempt occurred in June 2023, after which the price declined. However, XRP has been following an ascending support line since the beginning of the year, which has been in place for 190 days.
There is a risk of a breakdown as the price has already dropped below the ascending support line, although it has not yet confirmed a weekly close below it. A weekly close below the support line would confirm the start of a bearish trend.
Mixed RSI Reading and Bearish Divergence
The Relative Strength Index (RSI) provides a mixed reading. While the RSI is currently above 50, indicating bullish momentum, it is showing a decline, suggesting a weakening trend. Additionally, a bearish divergence is observed in the RSI, which often serves as a precursor to downward movements.
Bearish Pattern and Potential Breakdown
On the short-term six-hour time frame, technical analysis indicates that XRP is likely to break down from a descending triangle pattern. The descending triangle is considered a bearish pattern, signaling an eventual breakdown. Furthermore, the triangle forms after a downward movement, further supporting the possibility of a breakdown.
If the breakdown occurs, the next support area to watch for is at $0.44. However, if XRP manages to close above the triangle’s resistance line, the trend could remain bullish, potentially leading to a move towards the next resistance at $0.52.
The XRP price is currently facing challenges in breaking through a crucial horizontal resistance level, and it is trading within a short-term bearish pattern. Long-term support is at risk of breaking down, with a potential bearish trend confirmation upon a weekly close below the ascending support line. Mixed readings in the RSI and the presence of a bearish divergence add to the cautious outlook. In the short term, a descending triangle pattern suggests a potential breakdown, with the next support at $0.44. However, a close above the triangle’s resistance line could indicate a continuation of the bullish trend.