Ripple Breaks Support: Prepare for a Major Downtrend
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Ripple (XRP) breaking below the $0.544 support level signals a bearish trend, with a potential 25% crash if it fails to reclaim this level.
However, a daily close above $0.643 would invalidate the bearish outlook and could lead to a 12% rally.
Ripple price breaks below daily support level at $0.544, suggesting a bearish trend ahead.
Ripple (XRP) has recently shown signs of shifting from a bullish to a bearish market structure. The price breaking below the daily support level of $0.544 is a significant indicator of this change. For sideline traders looking to capitalize on this downturn, entry points between $0.540 and $0.574 are suggested for shorting XRP in anticipation of the price resuming its downtrend.
Ripple’s Price Action and Dead-Cat Bounce Potential
Ripple’s price fell below the daily support level of $0.544 on Sunday, leading to a 6.7% drop on Monday. However, a modest recovery was seen on Tuesday, with XRP trading 4.7% higher at $0.511. This price movement hints at a potential dead-cat bounce—a brief price increase within a broader downtrend.
In this scenario, the former support level at $0.544, now acting as resistance, becomes crucial. This level aligns with the 200-day Exponential Moving Average around $0.540, marking it as a significant reversal zone. Failure to break above this resistance could trigger a 25% crash, bringing XRP back to retest the $0.413 weekly support level.
Indicators Signaling Bearish Momentum
Several technical indicators support the bearish outlook for Ripple. The Relative Strength Index (RSI) and the Awesome Oscillator on the daily chart have both dropped below their neutral levels of 50 and zero, respectively. These indicators suggest a bearish trend is in play.
The Bullish Invalidation Point
On the contrary, if Ripple’s price manages to close above the $0.643 daily resistance level, it would invalidate the bearish thesis. A close above this level would shift the market structure by forming a higher high on the daily timeframe. In such a scenario, XRP could rally by 12% to retest its next daily resistance at $0.724.
Ripple’s price breaking below the $0.544 support level signals a bearish trend, with potential for a 25% crash if resistance at this level holds. Traders looking to short XRP should consider entry points between $0.540 and $0.574. However, a daily close above $0.643 would invalidate the bearish outlook and could lead to a 12% rally. As always, monitoring key support and resistance levels, along with technical indicators, is crucial for navigating the volatile cryptocurrency market.
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