After a prolonged slump, XRP (Ripple) has shown encouraging signs of a revival in recent weeks. The cryptocurrency, which had been locked in a downtrend for nearly four months, witnessed a sharp uptrend as it breached above the key 200-day exponential moving average (EMA).
This bullish move comes after XRP bulls successfully managed to break above the long-term trendline resistance and convert it into support. A sustained crossover of the 20-day and 50-day EMAs could further solidify this bullish momentum and pave the way for a longer-term uptrend in the coming weeks.
Rekindling Hope After a Sharp Decline
Prior to this recent surge, XRP had endured a steep downtrend, shedding nearly 42% of its value over the past four months. However, the $0.41 price level proved to be a crucial support zone, acting as a springboard for the rebound as overall market sentiment improved.
This positive shift allowed XRP bulls to recapture important technical levels, including the 20-day, 50-day, and the psychologically significant 200-day EMA. This bullish resurgence resulted in a significant gain of almost 45% for XRP in just the last ten days.
Facing Resistance and Gauging Bullish Strength
The price action has currently reached near the Point of Control (POC) line of the Visible Profile Volume Range, an area that typically represents the price point with the highest trading volumes. Consequently, this level could act as immediate resistance for XRP. Any reversals from this zone could potentially find support near the $0.57 level. A drop below this support could hinder the immediate recovery prospects.
The bulls will be aiming to maintain the uptrend by achieving a near-term crossover of the shorter-term EMAs (20-day and 50-day) above the 200-day EMA. This would set the stage for a potential test of the $0.72 resistance level.
Mixed Signals from Derivatives Market
The Relative Strength Index (RSI), a technical indicator that gauges momentum, has seen a sharp rise and is currently nearing overbought territory. This suggests a potential pullback in the near future, with the RSI likely retracing towards the 50-mark as buying pressure eases.
Also Read: Ripple Defies IPO Delay With $1.4 Billion Stock Buyback: Betting Big On The Future Of XRP
The derivatives market presents a mixed picture. While the overall long/short ratio leans slightly bearish, some major exchanges like Binance and OKX exhibit a dominance of long positions. Additionally, despite a decrease in options volume, the options open interest remains elevated, indicating a potential longer-term bullish sentiment within the options market.
XRP’s recent price action highlights a renewed sense of optimism among investors. However, navigating the immediate resistance zones and interpreting the mixed signals from the derivatives market will be crucial in determining whether the bulls can sustain the momentum and propel XRP towards a sustained recovery.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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