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XRP on Verge of Breakdown: Here’s What Can Happen Next

Tue, 28/05/2024 – 8:49

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XRP is actively consolidating at the 50 EMA support level right now and clearly poses the risk for a further breakdown. Unfortunately, in its current state, the fall below that level could cause some serious issues and push the price of the asset toward $0.5 and potentially even lower. However, don’t panic too early, as a proper break of the aforementioned support level will only be considered complete when the price opens up a few candles below the level.

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If we take a look at the chart below, we see that XRP is trading above the 50 EMA  but is yet to clear resistance from the higher levels of the 100 EMA, represented by the orange line, and the 200 EMA, represented by the black line. This kind of sideways movement portrays a stage of uncertainty, as volumes remain relatively muted. The RSI stands at a neutral 51 — not a near-term overbought or oversold reading to signal an advantage.

XRPUSDT
XRP/USDT Chart by TradingView

If it fails to hold above the 50 EMA, then the psychological $0.5 level is the next clear area to watch. Below this level, further moves could open the floodgates toward declines that test the lower support areas around $0.48 and $0.45. This setup may be pushed through by general market sentiment and the pressure it is facing right now, after Mt. Gox started redistributing funds among investors.

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On the other hand, if XRP can maintain a position above the 50 EMA and amass enough buying pressure, an opportunity for a bullish turnaround can be initiated. The first resistance is the 100 EMA. A break past this may throw XRP toward testing the 200 EMA to the $0.55 area. Above that, $0.6 is a really massive resistance that has proven to be a tough barrier to break through in the past.

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