The price of XRP has been maintaining a solid support level above $2.2, which has proven to be a significant barrier for bearish traders. This stability indicates that buyers are starting to re-enter the market, fueling expectations that this could serve as a launching point for the next price rally. However, a cryptocurrency analyst warns that this support level remains vulnerable as bearish pressures persist, potentially leading to a substantial decline in price.
Despite some recovery in the cryptocurrency market and a corresponding rise in XRP's price, the momentum has not been strong enough to confirm a lasting upward trend. Analyst MyCryptoParadise notes that there is a risk of a classic bear trap, where the asset could experience a temporary uptick before facing a downturn. This caution stems from several bearish indicators on the XRP price chart that suggest a downward trajectory is likely.
Notably, a Change of Character towards bearish conditions has emerged, indicating that sellers are gaining the upper hand, typically heralding the beginning of a bearish trend. Additionally, an inverse Cup and Handle pattern is currently forming, further complicating XRP's outlook. The analyst points out that these factors, coupled with a breach below a critical support trendline, signal that a price crash could be imminent. Current bearish pressure could lead to a 10% decline, bringing XRP closer to its previous support, which is just above the $2 mark. Should this happen, there is a significant risk of the altcoin dropping below $2, a scenario that would be extremely negative and could result in a rapid price decline.
MyCryptoParadise advises caution, suggesting that the best strategy is to wait for confirmation before making any market moves. They recommend observing for a “proper pullback” in the XRP price to enhance the risk-to-reward ratio following a confirmed trend direction. Conversely, there is a chance that XRP may not experience a downturn, particularly if it can successfully break above the $2.28 level. If this occurs, it would invalidate the bearish outlook and indicate a continuation of the upward trend. The analyst emphasizes the importance of patience in such a scenario to ensure clearer price movements before taking action.
