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XRP faces significant downward pressure, dropping 8.5% this week as technical indicators point to a bearish trend amidst bullish news.
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Despite positive headlines like a multi-million dollar investment from a Chinese AI firm, shares of XRP struggle to maintain momentum.
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According to COINOTAG sources, the combination of technical patterns and market sentiment suggests ongoing selling pressure.
XRP sees continued downward momentum despite recent bullish news, dropping 8.5% this week as technical indicators signal bearish trends.
XRP Enters Oversold Territory
XRP’s Relative Strength Index (RSI) has dropped significantly, now at 32.32, down from 48.68 just one day prior—marking a clear decline in momentum.
This steep adjustment indicates intensified selling pressure, bringing XRP close to the oversold threshold, yet it has not fully breached it.
Importantly, XRP’s RSI has not dropped below 30 since April 7, showing that while recent corrections have been sharp, they have yet to trigger the deeply oversold conditions typically observed during severe market pullbacks.
The current tension near 30 signals a potential exhaustion point in the downtrend; should buyers emerge, a price stabilization or rebound may be feasible.
This bearish momentum persists even in light of recent announcements, including a $300 million investment from a Chinese AI company, as well as VivoPower’s $121 million treasury raise backed by Saudi connections.
The RSI serves as a popular momentum indicator, varying between 0 and 100, intended to gauge the speed and scale of price fluctuations. Values above 70 typically denote overbought conditions and signal the likelihood of a price correction, while those below 30 indicate oversold states with potential recovery prospects.
With XRP hovering just above the oversold threshold, the market finds itself at a pivotal point; further decline could drive the RSI beneath 30, which might attract attention from technical traders looking for a bounce.
Additionally, stabilization at current levels could preempt further losses.
Given XRP’s consistent performance without breaching 30 for almost two months, a decline below that level could instigate renewed volatility, enticing bargain recruits or exacerbating selling momentum if critical support levels are breached.
XRP DMI Signals Strong Bearish Trend as ADX Surges Above 34
XRP’s Directional Movement Index (DMI) illustrates a notable escalation in trend strength and momentum, with the ADX climbing to 34.78—up from 27 just a day earlier.
The ADX, or Average Directional Index, gauges trend strength without denoting its direction; readings exceeding 25 indicate a robust trend, while numbers above 30 signal strong trends.
This sharp uptick in ADX affirms that the prevailing trend is intensifying. However, the directional indicators, +DI and -DI, clarify the trend’s direction, with +DI plummeting to 8.57, while -DI has surged to 32.
This widening gap between the indicators underscores a significant bearish trend. The declining +DI indicates waning bullish momentum, while the surging -DI highlights accelerating selling pressure.
With -DI now decisively higher than +DI and the ADX affirming the trend’s strength, XRP appears entrenched in a downtrend.
Unless a sudden uptick in buying interest occurs, the current situation points toward sustained downside pressure, reinforcing signals from other indicators like the RSI.
XRP Risks Dropping Below $2 as Bearish Momentum Builds
XRP’s exponential moving averages (EMAs) have revealed multiple death crosses in recent days, indicating persistent downward pressure as the token falters below the $2.50 mark.
These bearish crossovers, where short-term EMAs fall beneath long-term EMAs, signify a deteriorating trend, consistent with XRP’s recent struggle to regain bullish status.
A continued correction may see XRP retest the $2.07 support level, with a failure to maintain this threshold potentially leading to a drop below $2—an unwelcome price not seen since April 8. Such a development could validate a broader shift in market sentiment and potentially escalate bearish momentum.
Nonetheless, the outlook could pivot if buyers regain control, allowing XRP to reverse its current trend. In this case, $2.26 remains a critical resistance level; a successful breakout could mark renewed strength and elevate upside targets at $2.36, $2.47, and even $2.65.
Clearing these resistances would require significant volume to negate existing bearish EMA configurations.
As it stands, the series of death crosses serves as a warning, indicating that downward pressure is dominant unless bulls execute a decisive recovery.
Conclusion
In summary, XRP is currently grappling with substantial bearish momentum despite positive news. Indicators like the RSI and DMI signal a challenging environment for buyers, with critical support levels looming ahead. The potential for a drop below $2 underscores the urgency for volatility management, while traders should remain vigilant for signs of recovery as the market evolves.
