XRP is showing bearish momentum, with a top market analyst highlighting the crucial moving average it must hold to avoid further declines.
Recently, market technician Egrag Crypto spotlighted the current situation as XRP joins a broader bearish trend. After rebounding from $1.82 two weeks ago to stabilize around $2.20 for most of last week, the cryptocurrency has now corrected by over 7% over the past two days, trading close to the $2 price mark.
XRP Must Hold Critical EMA
Meanwhile, Egrag Crypto identified three possible scenarios for XRP, using Fibonacci levels and moving averages. Notably, one outcome is an intense capitulation in XRP if it closes below its 21-month exponential moving average (EMA).
He emphasized the need to stay above this indicator, suggesting that XRP’s fate could be dire if it closes below the 21 EMA. “No sugar-coating it,” he said.
At the time of writing, the 21 EMA stands at $1.907, which is 6.38% away from the current market price of $2.037. A close below would set XRP’s price on a path towards lower targets, such as $1.55, as predicted by other analysts.
It bears mentioning that the analyst specifically noted the importance of a monthly close below the 21 EMA to confirm any downward trend.
Bullish Possibilities Remain
Nonetheless, bullish scenarios are still in play. Egrag Crypto discussed the potential for bullish and even super-bullish outcomes for XRP based on Fibonacci levels.
Specifically, he shared that a close above the 0.50 Fibonacci level depicted in his analysis would signify bullish momentum for XRP. This level aligns with the $2.60 price mark, which is about 27% away from where XRP currently trades. However, he cautioned that XRP is not entirely free from downside risk at that level.
Moreover, he identified a super-bullish scenario in which XRP closes above the 0.88 Fibonacci level at $3.40. A retest of the January high could catalyze strong upside momentum for the cryptocurrency, possibly driving it to unprecedented heights.
XRP Not Bearish in the Slightest
Despite recent retracements, XRP remains in a precarious position. The asset experienced a downturn of over 5%, resulting in the liquidation of approximately $16.74 million in leveraged positions within a mere 24 hours, predominantly affecting long traders.
However, analysts advocate that XRP could soon surprise the bears. Charting Guy, among others, asserts that XRP is not bearish in the slightest, citing the asset’s trend above its 2021 peak of approximately $1.97 as an indicator of its underlying strength.
Building on this perspective, he expressed that XRP appears to be testing holders’ patience, with many investors already folding under the pressure. He also suggested that XRP is currently in an accumulation phase, potentially paving the way for a breakout towards $8.
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