Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
XRP’s price spiraled down the charts in December 2020 after the SEC filed a lawsuit against Ripple and its executives. Following the same, numerous exchanges based in the United States of America delisted or suspended XRP.
However, the value of the digital asset did see some respite, with Bitcoin rallying in the market. The value of XRP dropped to $0.1686, following which, it surged to a price level above $0.2. At the time of writing, XRP was trading at $0.2804.
XRP Daily Chart
Source: XRPUSD on TradingView
XRP’s daily chart noted the strong surge that followed XRP’s fall on the charts Since then, the cryptocurrency’s price has been constricted within a descending triangle, with the support at the price level of $0.2656. However, this trend has often been followed by a bearish breakdown.
With the market taking shape for another fall, the cryptocurrency’s holders can short the digital asset.
Reasoning
The bearish pattern forming in the XRP market was an indicator of the selling pressure on XRP’s price charts. In fact, the 50 moving average crossed over the price bars after the dump noted in December.
On the contrary, the Relative Strength Index dropped to the oversold zone when the price crashed, before recovering to the equilibrium zone. However, this is debatable since the selling pressure has risen, despite the RSI noting just a gradual drop.
Adding to the bearishness in the market, the market seemed to be also losing momentum. The selling pressure contributed to the AO dropping in the negatives, and the short bars on the histogram highlighted the low momentum in the market.
Important levels to look out for
Entry: $0.2654
Stop-Loss: $0.3095
Take-Profit: $0.1986
Risk-to-Reward: 1.51
Conclusion
The XRP market is seeing bearishness take charge. With signs of a sell-off becoming evident, the traders may enter at $0.2654 and take profit at $0.1986, which could be seen as another brief support for XRP.
