XRP is trading above its crucial support levels, but signs of weakness remain. The token is moving around the $1.30-$1.35 range and trying to figure out how to maintain a bullish trend after giving out signals for a breakdown.
The overall structure remains weak, followed by a neckline breakdown, a classic pattern that generally confirms a further drop.
XRP is yet to break above its key moving averages, indicating that this bounce could be a correction and not the start of a recovery.
Momentum indicators indicate the token is still trading below its 50-day and 200-day Exponential Moving Averages (EMAs) and sellers are still controlling the longer period market.
The Relative Strength Index (RSI) continues to remain in the low range, which signifies reduced buying pressure. Meanwhile, the Moving Average Convergence Divergence (MACD) remains in the bearish zone, suggesting a bearish sentiment.
From a technical perspective, XRP currently holds an important support zone near the $1.25-$1.30 level. Despite the weakness of the broader crypto market, the drop here was not sharp, and in the short term, a base was kept here.
A decisive break below this could drag the token to $1.20, which is becoming a major downside target in the ongoing cycle.
On the upside, a strong resistance can be seen at the $1.40-$1.45 region, which was a demand-turned supply zone in the past.
This zone coincides with some key moving averages, thus posing significant resistance to any recovery attempt.
An invalidation of the current bearish structural setup requires a sustained move above this range, hence shifting momentum back in favour of buyers.
While support levels are intact, the inability to regain the higher level indicates that there is limited upside in the short term.
Failure to break above resistance means that there is room for further downside correction toward $1.20.
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XRP derivatives data suggest the bounce-back isn’t going to last long enough due to positioning and flows.
XRP futures Open interest (OI) is up by 1.68% to $2.49 billion over the last 24 hours, indicating fresh participation in OI, while a sharper 18% rise in volumes reflects increased short-term or intraday action as opposed to directional conviction.
On the other hand, the XRP futures OI-weighted funding rates are marginally positive at about 0.005%, further indicating a shift from bearish positioning.