XRP is in a critical position, prompting experts to caution investors as the asset inches closer to creating its first death cross in over a year.
Two prominent yet pseudonymous crypto accounts, Lord Crypto and CryptoBusy, recently took to X to highlight XRP’s delicate position.
Lord Crypto’s commentary pointed out that XRP has experienced a substantial price decline, losing nearly 50% of its value since the rally from the lawsuit victory. Notably, XRP is 46% down from the high of $0.9380 in July.
The analyst drew attention to the BMA Band, noting that the 20-week SMA (red) has crossed above the 21-week SMA (green). Following the flip, both SMAs have continued to drift apart, suggesting further downward pressure in the absence of bullish news or catalysts.
The accompanying chart showed that XRP has encountered persistent descending resistance levels since mid-August, a pattern that ensued amid the correction from the $0.9380 high.
Notably, as XRP attempts to rise, it faces resistance at lower values, making it progressively harder for the asset to achieve higher price points. Conversely, the chart shows that XRP’s support points have been rising, preventing higher price drops.
However, the analyst singled out a main support level at $0.42. Lord Crypto noted that unless new positive developments or news emerge, XRP may be prone to experiencing another decline, potentially approaching the main support level at $0.42.
XRP in a Symmetrical Triangle
CryptoBusy, a crypto-focused media and analytical account, highlighted the formation of a symmetrical triangle on XRP’s daily chart. This pattern, which started taking shape in mid-August, is characterized by converging trendlines.
When XRP is within such a triangle, it often signifies indecision in the market. Neither buyers nor sellers have gained full control, leading to uncertainty. Within this context, CryptoBusy advises caution for XRP traders.
The Crypto Basic called attention to this pattern in a previous analysis. The symmetrical triangle suggests that the market is in flux, making it challenging to predict the cryptocurrency’s immediate direction.
This lack of clarity implies that trading XRP at this juncture may be best suited for short-term strategies like scalping or intraday trading, where traders can capitalize on smaller price fluctuations.
XRP’s Impending Death Cross
One of the most crucial patterns on the daily chart is the potential formation of a death cross. A death cross occurs when a shorter-term moving average, in this case, the 50-day EMA, crosses below a longer-term moving average, the 200-day EMA.
The last time XRP experienced a death cross was in December 2021. After the 50-day EMA crossed below the 200-day EMA on Dec. 17, 2021, XRP witnessed a substantial decline. It tumbled from a high of $1.016 to a low of $0.5489 on Jan. 22, 2022. This marked a 46% drop in one month.
With the 50-day EMA ($0.5289) nearing a potential cross below the 200-day EMA ($0.5195), XRP is again at risk of encountering a death cross. This metric adds to the prevailing bearish sentiment.
XRP trades for $0.5027, below the 50-day EMA ($0.5289) and the 200-day EMA ($0.5195). This position below the short and long trend moving averages compounds this bearish sentiment.
To mitigate further losses, XRP bulls must vigorously defend $0.50. Should this level give way, the next significant support lies at $0.4908. Falling below this support would bring the $0.4801 price point into focus, followed by $0.4694.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
