XRP faces resistance at $2.4 – Will bulls overcome the barrier?
XRP has formed multiple ranges in recent months, and each has been shorter than the previous one.
- XRP could perform well in the event of a Bitcoin rebound, since selling pressure has been lesser.
- A bounce to $2.4 was likely in the short term, and continued gains would flip short-term bias bullishly.
Ripple [XRP] exhibited strength against Ethereum [ETH], the foremost among altcoins by market cap. CoinMarketCap data showed that XRP has gained 5.57% in 24 hours, compared to ETH’s 2.25%.
Even otherwise, ETH has erased all its gains following the US Presidential election, while XRP was still up by 351% from the 4th of November’s low. Can XRP recover after the retest of the $2 support?
XRP maintains its bearish structure
XRP has formed multiple ranges in recent months. Each has been shorter than the previous one.
The most recent one, which was broken out of in mid-February, has reversed the bullish move and fallen below the range lows.
The range lows happened to be the 78.6% Fibonacci retracement level based on the rally earlier this year that reached the $3.4 high.
While the price retraced almost all the gains from that rally, the A/D indicator continued to trend higher.
This meant that accumulation was going on despite the retracement. The lack of selling pressure meant that XRP recovery could be quick.
Given the bearish structure and the importance of the $2.3 resistance level, a move higher did not appear likely in the near term.
The MFI was at oversold levels and suggested a potential price bounce, but this move might struggle to push beyond $2.3.
The 1-month liquidation heatmap showed a large liquidity pocket at $2.84-$2.88. This was the lower high from mid-February after the bullish range breakout was retraced.
The $2.36 and $2.62 levels were also important interim magnetic zones that could attract prices.
The 1-week chart showed that a strong short-term magnetic zone was present at $2.36, as illustrated on the monthly chart as well.
So, a short-term price bounce to $2.36-$2.4 was likely, and would then be followed by a price drop.
This was because, even though the A/D indicator showed subdued selling pressure on the daily chart, the market structure was bearish.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
