XRP has been on a downward spiral, leaving buyers scrambling to reverse recent losses. The coin currently sits at an 18% deficit compared to last week, with sellers dictating the price action. However, a potential turnaround could be brewing if prices manage to break free and recoup some of those losses.
Technical Indicators Point South
Technical analysis paints a bearish picture for XRP. The coin is trapped within a double top formation, a bearish reversal pattern where the price creates two successive highs around the same level, with a trough in between. This pattern, established in November 2023, suggests a potential decline.
Furthermore, trading volume has also dipped by 6% in the past 24 hours, showcasing a decline in market participation. This likely reflects a cautious sentiment among traders who are staying on the sidelines for now.
Ripple’s XRP Sales and DeFi Proposal: Market Movers?
Recent events surrounding Ripple, the company behind XRP, could also influence the coin’s price in the coming days. On Sunday, Ripple sold 100 million XRP from their monthly escrow allotment, potentially adding downward pressure. However, some of these coins were moved to a treasury account, which might limit the immediate impact.
On the other hand, a proposal for a DeFi lending protocol built on the XRP Ledger (XRPL) has emerged within the XRP community. This protocol, inspired by successful projects like MakerDAO and Aave, could potentially boost XRP’s utility by allowing it to be used as collateral for loans. If implemented, the inclusion of tokenized versions of Bitcoin and Ethereum within the protocol could further increase XRP’s relevance.
Also Read: XRP Price Up, But Inflows to Exchanges Surge 450 Million Tokens – Is a Dump Coming?
XRP Price Analysis: Key Levels to Watch
Looking at the daily chart, XRP/USD exhibits a clear downtrend. The $0.50 level remains a crucial resistance point, and a break above it could offer some reprieve from the selling pressure. Additionally, traders should keep an eye on the April 13th high of around $0.55, as surpassing that point might signal a potential reversal.
Currently, XRP is trading within the bearish candlestick formed on April 13th. This formation strengthens the case for the sellers, despite a brief price dip below this level on April 14th. Short-term traders could potentially use these highs as entry points to short XRP, aiming for targets near $0.40 or the April 13th highs.
The coming days will be crucial for XRP. If the bulls manage to push the price above $0.55, it could slow down the current downtrend and allow buyers to re-enter the market and potentially erase some of last week’s losses. However, if the sellers maintain control, XRP could face further decline towards the $0.40 target.
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