Low volatility and steady downward moves are the two main features of the XRP market lately. Breaking below the $0.65 support level worsened the recent decline, and failure to hold the next $0.580 support level could have a bigger impact on the price. At the time of writing, XRP is trading at $0.590, down 2% over the past 24 hours.
XRP/USD Daily Chart. Source: TradingView
Since the beginning of July, XRP has been trading on a descending channel, which has steadily pulled the cryptocurrency down to a lower level on the chart. The lack of volatility does not allow for any major retracement, but the decline in trading activity and volume affect prices.
In addition, the 50-SMA (yellow) is gradually approaching the 200-SMA (green), and the Death Cross will be the XRP’s first in more than five months. Focus can now move to the $0.580 defense line and while recent analysis suggests the region could lead to another recovery, the market is showing signs of further weakness.
Reasons
With short positions largely driving the trend of XRP, the relative strength index stayed below 50-55 for the past two months. As the downward pressure gradually increased, XRP’s price trend confirmed the downward trend in the index’s release time. On-balance volume is also on a downtrend, suggesting that selling pressures continue to outweigh buying pressures – given the lack of bullish evidence in the market, this trend is unlikely to change.
While the Awesome Oscillator is noticing some upside momentum, it’s not enough to trigger upside volatility as the index is still below its half-line.
With XRP’s 20-SMA (red) also bearish, the price is expected to be below $0.65 for the next few days. At the same time, market watchers need to be careful if they close below $0.580 as it could cause the June 22nd swing low of $0.509 to fall another 12%.
Conclusion
XRP has shown several signs that it will continue to fall in the coming days. A break below the $0.580 support level could cause the next line of defence to fall sharply around $0.509. Although traders can choose to short XRP when the closing price is below $0.580, it is safer to trade long once the altcoin price reaches a more critical support level.
This is not a piece of financial advice from Fxcryptonews writer, please do your own research before buying the asset
