XRP sell-off fears intensify – 3 reasons why

YEREVAN (CoinChapter.com) – XRP, the native token of Ripple Ledger, traded at around $0.72 in Monday’s European session, after a 5% intraday decline. Furthermore, several technicals pointed to a bearish continuation.

#1 Rising Triangle Setup

The money transfer token formed a Rising Triangle on its weekly chart. The latter entails a flat resistance line that hinders further price appreciation and rising support. The support/resistance that constituted the Triangle’s upper trendline has been relevant since May 2021, while the lower trendline provided XRP with assistance since the Jan. 2022 dip.

The said Triangle is a bearish setup and predicts a drop equal to the maximal distance between the trendlines. Thus the target price for XRP would stand at approximately $0.35, the lowest value since Jan. 2021. The token followed the formation’s prediction and broke the support in the first week of April.

Also read: XRP sees a 25% uptrend while the judge slams the SEC’s Motion to Strike Ripple’s Fair Notice Defense.

Notably, the 200-week exponential moving average (EMA-200; blue wave) could cushion the descent, providing interim support.

#2 Trend-based indicators spell trouble

XRP’s Moving Average Convergence Divergence (MACD) histogram looked primed for a bearish crossover. In detail, MACD is a  trend-following momentum indicator that shows the relationship between two moving averages (9-week and 26-week on the chart above).

Also read: After XRP, the U.S. securities regulator goes after the booming NFT sector.

Another trend-based indicator, the relative strength index (RSI), remained impartial and slid to 43 in the Monday session. Notably, the RSI aims to signal whether a market is considered to be overbought or oversold at current price levels. Thus, the 43 reading is neutral while not indicating slowing downside momentum.

#3 XRP bulls inactive

Meanwhile, XRP’s trading volumes have declined since early August 2021, signifying traders’ reluctance to create substantial buying pressure for a rally. Thus, the passivity among XRP bulls could confirm the bearish prognosis.

Based on all the bearish technicals listed above, XRP has slim chances of an uptrend in the coming week. Additionally, the altcoin remains dependent on Bitcoin and the overall climate across the digital asset sector.

Also read: Are XRP and Ethereum both securities? Even SEC chair Gary Gensler doesn’t have an idea.

The flagship cryptocurrency declined 13% since establishing a local top on Mar. 29 and broke below a significant support/resistance at $43,000. Thus, XRP followed suit, as did most digital assets in the top 10 cryptos by market cap.

Thus, XRP’s chances of slowing down the bearish momentum looked grim. However, the upcoming sessions will show if the predictions have merit.