Why did the XRP price suffer this brutal rejection?
The crypto market is going through a turbulent patch, and XRP is no exception. After an attempted bullish breakout above $1.35, the asset faced a wall of sellers. This technical rejection is accompanied by a worrying drop in liquidity, making the order book particularly vulnerable to sudden movements. Indeed, XRP failed to hold its 4 hour POC.
Currently trading around $1.31 (with a variation of about -1.5% over 24h), the Ripple token is showing signs of weakness. Market depth is collapsing, meaning less volume is required to move the price. In this bearish environment, institutional traders appear to be reducing their exposure, intensifying the selling pressure.
This market dynamic raises concerns about the strength of the current trend. When a breakout fails alongside declining liquidity, it often results in a rapid retracement, with trapped buyers urgently closing their positions to limit their losses.
However, it is worth noting the appearance of a 4 hour order block, signaling smart money accumulation between $1.27 and $1.31. This area provides a short term support level to watch closely. A bounce off this zone is highly likely if smart money defends this area in the coming days.
Technical analysis: What are the key levels to watch?
From a technical analysis perspective, the situation for XRP requires close attention. The $1.35 level has been confirmed as a major resistance, violently rejecting buyer assaults. On the downside, the first critical support lies in the $1.27 to $1.30 zone, the order block mentioned earlier.
If this psychological threshold were to break, the correction could accelerate toward $1.24, a level corresponding to a key retracement. Technical indicators, such as the RSI, show an exhaustion of the bullish momentum, while the MACD threatens a bearish crossover on the daily timeframe.
However, all is not lost for the bulls. If XRP manages to consolidate above $1.30, it could accumulate enough energy to attempt another breakout. A daily close above $1.36 would invalidate this bearish scenario and revive hopes for a new rally. Subsequently, the HTF POC around $1.41 remains the crucial resistance to overcome.
Can XRP bounce back or will it collapse below $1.30?
The current setup puts traders on a knife edge. On one hand, the bullish scenario relies on the fierce defense of the $1.30 support. If whales take advantage of this dip to accumulate, XRP could surprise the market with an explosive bounce toward its recent peak.
Furthermore, liquidity is located to the upside, with that cluster of shorts still sitting at $1.38. The shorts have been mostly liquidated, providing a bullish confluence for a bounce toward $1.40 in the coming days.
On the other hand, the bearish scenario seems to be gaining momentum. With liquidity drying up and short positions accumulating, a break below $1.30 could trigger a domino effect. Cascading liquidations could then plunge the price to much lower levels.
As volatility prepares to make a major comeback, the question remains open for investors: is this the perfect time to buy the dip, or should we brace for an even more violent drop in XRP over the coming days?
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