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XRP has suffered a severe blow after a massive false breakout, leaving bulls reeling and attempting to recoup their losses. This sudden move, which erased the optimism gained over recent days, serves as a harsh reminder that the market is far from being cleared of its uncertainty.
In a shocking turn of events, XRP’s price rapidly increased, only to plummet back down, invalidating the previous day’s gains and rekindling fears of further declines. The sudden downturn has left investors questioning the sustainability of the recent upswing, and instead, focusing on preserving their capital.
A brief analysis of the chart reveals that the token has been forming a rising wedge structure since mid-June. As a result, it was squished between clusters of moving averages overhead and support trendline. Yesterday’s brief escape from this squeeze led to an initial increase in volume, which initially seemed promising. However, price action sharply reversed instead of proceeding as anticipated.
This sudden drop is now considered a bearish signal that confirms distribution rather than long-term accumulation. Meanwhile, the 50 EMA line is beginning to roll over and slide downward toward the 100 EMA, indicating weakening underlying momentum and paving the way for deeper corrections.
Furthermore, moving averages are converging as dynamic resistance above, making it increasingly difficult for XRP to overcome the technical backdrop. The market may not be overbought or oversold if the RSI remains at or near 55, leaving room for further declines, especially if pessimism gains traction.
In conclusion, traders should pay close attention to whether XRP can maintain support between $2.10 and $2.20. If this zone fails, it could lead to a wave of stop-loss selling, indicating a potential collapse.
Source: u.today
