Key point:
XRP’s drop below $3.40 opens the gate for a decline to $3. Would a solid bounce off $3 lead to aggressive buying from bulls?
XRP ( XRP ) rose to a multi-year high above $3.66 on Friday, indicating aggressive buying by the bulls. That helped XRP’s market capitalization exceed that of the global fast-food giant McDonald’s on Monday. However, the failure to sustain the momentum may have tempted short-term buyers to book profits after the sharp run-up.
What are the critical support and resistance levels to watch out for? Let’s analyze the charts to find out.
XRP price prediction
XRP’s failure to climb above the $3.66 resistance in the past few days has started a pullback below $3.40.
The XRP/USDT pair could plunge to the 20-day exponential moving average (EMA) ($2.99), which is a critical level to watch out for. If the price turns up from the 20-day EMA with force, it signals buying at lower levels. The bulls will then try to push the price to $3.66. A break and close above $3.66 could thrust the pair to $4 and then to $4.86.
This optimistic view will be invalidated in the near term if the price continues lower and breaks below the 20-day EMA. That suggests the break above $3.40 may have been a bull trap.
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The pair plunged below the $3.34 support, indicating that the bears are trying to make a comeback. The next support on the downside is at $3 and later at $2.80. If the price turns up from the support zone and breaks above the moving averages, it suggests that the corrective phase may be over. The pair could then climb to $3.66.
Instead, if the recovery stalls at the 20-day EMA, it suggests a change in the sentiment from buying on dips to selling on rallies. That increases the risk of a deeper fall to $2.60. Such a move may delay the resumption of the uptrend.
