XRP encountered a barrier at $2.40, leading to a more than 10% drop to test the crucial $2.00 support level. While overall market weakness is a factor, the rise in liquidations and profit-taking seems to be speeding up the decline.
With traders keeping a close watch on the $2.00 threshold, the pressing question is whether XRP can withstand the pressure or if further downside movement is on the horizon.
XRP Stalls at $2.40 Amid Rising Resistance
XRP’s advance to $2.50 was suddenly stopped at the $2.40 resistance point, triggering a sharp retreat below $2.30. The daily RSI has dropped from overbought territory, standing at 60.65 currently, indicating weakening bullish strength.
Simultaneously, the OBV displayed a decrease from its peak, demonstrating reduced buying interest and diminishing market excitement.
Despite a slight recovery above $2.20, the failure of XRP to reclaim the $2.30 level, combined with bearish momentum signals, implies continuous selling pressure.
While lacking a definitive move above $2.30, XRP could stay exposed to further declines, with $2.00 emerging as a crucial level of support to monitor.
The Importance of the $2 Threshold for XRP
The $2.00 level assumes significance as a pivotal support for XRP, both on a psychological and technical basis. Historically, significant rounded figures like $2.00 tend to attract traders, often serving as a robust floor or a trigger point for extended declines.
Technically, a breach of this level could indicate a shift in XRP’s medium-term trend, potentially leading to a deeper correction towards the support regions at $1.88 or even $1.75.
A clear break below $2.00 might induce a series of liquidations as leveraged positions unwind, exacerbating the selling pressure. With the RSI already in a bearish zone and the price struggling beneath key moving averages, maintaining $2.00 becomes crucial.
If this support falters, it could trigger intensified volatility and potentially disrupt bullish recovery attempts in the short run.
The Impact of Liquidations and Market Sentiment
Analysis of liquidation data reveals significant turbulence during XRP’s decline from $2.50 to $1.98. Liquidations clustered between $2.40 and $2.25 were prominent, with heightened activity close to $2.10 as long positions were forcibly closed.
These findings indicate that overleveraged traders played a part in the price downturn, exacerbating the bearish momentum.
Behavior on-chain suggests a surge in retail exits along with probable whale sell-offs as XRP neared a critical support level. Should $2.00 be breached, additional liquidation cascades might amplify downside turmoil, echoing recent patterns.
This scenario underscores the fragile equilibrium between technical levels and market sentiment.
Is XRP Set for a Rebound or Further Declines?
XRP’s potential to reverse its downward trajectory is dependent on its ability to surpass the $2.30 resistance level and find stability – the road to recovery appears uncertain, particularly with ongoing liquidation pressures.
A recovery from the $2.00 support could initiate a short-term bounce, but if selling pressure intensifies, XRP faces the risk of deeper descents, possibly targeting levels below $2.00.
The upcoming market movement will heavily rely on broader sentiment and how leveraged traders behave, underscoring the significance of a definitive move for XRP’s future trajectory.