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Ripple (XRP) has been trading in a tight range between $2.7 and $3.1, signaling the start of a consolidation phase before the next significant move.
After breaching the $3.4 resistance level earlier this month, XRP’s price experienced a sharp decline towards the 0.5 Fibonacci retracement level around $2.7. This region is expected to provide support to the market, potentially leading to a minor pullback and subsequent consolidation.
The recent surge above $3.4 was likely caused by smart money targeting stop-losses from over-leveraged long positions, a classic bull trap scenario. As a result, it’s crucial for traders to remain cautious and look out for a confirmed breakout before entering any new trades.
In the short term, XRP is expected to range-bound between $2.7 and $3.1, absorbing selling pressure before its next decisive move. A valid breakout above or below this range will likely prompt a strong directional move, which investors should be prepared for.
The 4-hour chart suggests that sellers have been in control since the initial rejection at $3.4, reinforcing the notion of a bull trap. The cryptocurrency has found support at the 0.5–0.618 Fibonacci retracement zone, triggering a minor bullish correction.
A potential breakout above $3.1 could lead to a retest of the $3.4 high, while a breakdown below $2.7 would expose the $2.58 level as the next key area of support.
In conclusion, traders should be cautious and watch for a confirmed breakout before making any new trading decisions.
Source: cryptopotato.com
