This week began with XRP under intense selling pressure after the digital currency slipped below a crucial support level at $3.0. Contributing to this bearish narrative, the short-term 50-day Exponential Moving Average (EMA) has dipped below the long-term 200-day EMA, a pattern that technical analysts dub as the “death cross.” Additionally, significant XRP transfers by large-scale wallet holders to major exchanges have compounded the pressure on the cryptocurrency. The $2.95 mark now stands as a tough resistance, with XRP testing and struggling to sustain at this level. If XRP breaks the $2.81 support, it could spiral down significantly, even plummeting to the $2.00 mark.
The Perilous Points for XRP?
The chart pattern that emerged in August saw another death cross occurring for the third time. This phenomenon previously triggered declines: from $3.12 to $2.93 in mid-August, followed by a dip from $3.03 to the same level later that month. This repetitive pattern signals a weakening short-term bullish trend and lowered investor confidence.
On a daily scale, XRP has battled to breach the Fibonacci resistance at $2.95. Every surge towards this threshold triggers selling, causing price compression within a constrained range.
What Drives the XRP Surge to Exchanges?
Analysis by CryptoQuant indicates a spike in tokens moved to exchanges by large stakeholders aiming for profit-taking. Notably, large withdrawals peaked around August 13, with 29,805 XRP relocated as the price slid from $3.27 down to $3.08. By August 21, these transfer volumes swelled notably, jumping nearly sevenfold from earlier lows.
Historically, such surges in exchange transfers often preempt further price drops. Following significant hikes in late July and early August, the price cascaded from $3.09 to $2.76, and from $3.07 to $2.96, respectively.
Should current exchange inflows exceed the August peak, it would mark a higher high in this downturn, potentially amplifying short-term selling pressure. To reverse fortunes, inflows need to decline alongside a robust breach of $2.95.
Concrete insights suggest:
- Breaking $2.81 could lead to further losses down to $2.72 and possibly $2.00.
- Exchange inflows exceeding previous peaks might signal heightened selling activities.
- A break above $2.95 is crucial for any reversal in trend.
The crypto market responds rapidly to these technical patterns and influxes. Insights and predictions remain reliant on these indicators, but one must not ignore the potential surprises that could arise from unforeseen market dynamics or external influences.
