XRP traders can look for a risky buying opportunity at this support level
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The range formation showed bulls could mount a small comeback soon.
- The speculators leaned heavily bearish and traders should wait for a reaction from the highlighted support.
Bitcoin slumped from $29.8k on 30 April to reach $27.8k on 2 May. It bounced to $28.8k but this level acted as resistance and rebuffed bullish advances in the short term. This event saw the altcoin market, including XRP, post losses over the past 20 hours.
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The mid-range support level was hotly contested since 1 May, but it was ceded by the bulls in recent hours. While this development showed bears were in control, it was possible that XRP bulls had some fight left in them.
The range lows could be worth waiting for a reaction from
Since 21 April, XRP has traded within a range that extended from $0.44 to $0.48. The $0.48 was also a significant resistance level. The mid-point of this range was at $0.46 and has acted as support in recent days.
The RSI fell beneath the neutral 50 mark after the rejection from the $0.48 range highs on 30 April. The OBV was in decline over the past three days. Therefore, there was some bearish momentum in the near term that can push XRP to the $0.44 support.
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From there, it was possible that the bulls can force the bears back and drive prices back to range highs. Until there was a sharp wave of selling that drives BTC lower, it remained likely that XRP would see a bounce.
A positive reaction can allow traders to long XRP with a stop-loss beneath $0.4335, targeting the range highs.
The falling funding rate did not bode well for the buyers
Over the past couple of days, the funding rate began to decline slowly. Coinalyze data showed it was in negative territory at the time of writing. This meant that short positions were the majority in the market, and signaled bearish sentiment in the market.
The Open Interest declined alongside the price of XRP in the past 24 hours. This discouraged long positions in the market and further cemented the idea of bearish sentiment in the short term.
This does not rule out the possibility of a bounce from $0.44, but it showed that XRP buyers at that support level must wait for a strong bullish reaction and exercise caution.