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XRP nears major support zone but can buyers find the strength again this time

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Source: Pixabay


XRP was rejected firmly at the $1 mark, which was both a higher timeframe significant level as well as a round number resistance. Since that rejection last week, XRP has formed a series of lower highs. The $0.88 area, which was important on a longer-term outlook, has also been lost to the bears. Over the next few days, XRP could dip to $0.8 once more. The bulls have already stepped in with some strength in this area, but their strength could have waned upon repeated tests of the same level.

Source: XRP/USDT on TradingView

The Visible Range Volume Profile showed that the price was trading within the Value Area, and the Point of Control lay at $0.84. The price has tested this level as resistance and was within a short-term descending channel (yellow).

The longer-term Fibonacci levels (yellow) have also not held as support- the 38.2% level at $0.88 was defended for a few hours but sellers proved to be too strong. A shorter-term set of Fibonacci retracement levels (white) were also plotted, and the price was below its 23.6% level too.

The $0.8-$0.81 area has seen the price bounce in recent days (cyan box).

Rationale

Source: XRP/USDT on TradingView

The OBV formed an ascending wedge pattern and broke down, and was at a horizontal level that has been important in recent days. If the hourly OBV closed below this, it could indicate that sellers were dominant.

The Awesome Oscillator was moving below the zero line and showed bearish momentum. However, the CMF moved back above -0.05 and showed that capital flow had been directed out of the market, but changed in the past couple of hours. The point remained that bulls remain on the back foot and defending the $0.8 level.

Conclusion

Even though the most recent candle close indicated buyers bought a significant dip, it was not yet clear whether they would be able to follow through and force prices higher. The price chart showed some support lay at the $0.8 area, which would coincide with the channel lows and provide further confluence. Even if XRP saw a bounce in the coming days, it would likely be stalled at $0.86-$0.88 area as it was a significant resistance area.

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Akashnath is a Chemical Engineering graduate deeply fascinated by Technical Analysis and the crypto markets and enjoys studying price movements and trying to find patterns.

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