XRP has shown a recurring cycle of sharp rallies followed by deep pullbacks over the past several years. Looking back to 2018, the token reached a peak before crashing nearly 96%, demonstrating the classic blow-off top scenario.
After this massive decline, XRP formed a consolidation base where stronger investors began accumulating, setting the stage for future rallies, according to Analyst JD X post from March 20.
However, in the 2020-2021 period, XRP tried to go on a rally once more, though it was not able to surpass its old all-time high price. After that, it went down by 85%.
However, there was a notable change, and it was seen that XRP was moving along a rising trendline, indicating that the market was slowly building an uptrend.
Later, it was seen that the dips were getting smaller and smaller, and each subsequent low was higher than the previous one, indicating a stronger and stronger uptrend.
Also Read: XRP Price Stalls Below Resistance as Analysts Eye $4 Move
XRP Current Price Action Reflects Weak Momentum
XRP is going down in a downtrend. It is evident from the price action shown by the purple dotted line. The price is also being confirmed by the orange dashed line from the Tradingview data up to March 20. It is clearly showing lower highs and lower lows.
Although the price is rising from the lows of February, it is not rising above the middle of the channel. Therefore, the buyers are not strong enough to change the trend.
Momentum indicators are showing a cautious approach. The RSI is in the low 50s, which represents a neutral momentum reading. The MACD has a small bump near zero.
This represents a weak rally in a larger bearish trend. Also, stats are showing that the current run-up is at 0%, which represents that the total run-up is well below historical levels.
Technical Setup Suggests Potential Breakout
Despite the bearish nature of the current market, XRP is seen to accumulate at an upward-sloping support line. Analysts have indicated an ascending triangle formation, which has resistance at previous high points and increasing support at lower points.
This pattern breaks out when buyers enter the market aggressively, allowing the asset to rise above previous cycle high points. Important levels of resistance lie in the $1.50-$1.60 region, where sellers will likely enter and defend their positions.
On the downside, the lower end of this descending channel represents important levels of support. Breaking through this level will cause another strong fall, similar to the one in February.
According to history, if XRP breaks through its current levels of resistance with strong trading volumes, it will rise fast; otherwise, it will just trade sideways.
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
