XRP posted a 1.38% gain in the past 24 hours, but was still down 0.85% over the past week, according to CoinMarketCap data. This reflected a lack of a short-term trend for the altcoin recently.
The longer-term trend was bearish.
A recent AMBCrypto report showed that long-term holders were taking profits and that Spot ETF flows were drying up.
What explains the past 24 hours’ Ripple [XRP] price bounce, then? The most likely candidate is the Bitcoin [BTC] bounce back above the $90k psychological resistance, as pro-crypto lawyer Bill Morgan commented.
Examining the chances of a bullish trend change
Source: XRP/USDT on TradingView
The moving averages made a bearish crossover in October to reflect a shift in the 1-day timeframe’s trend. From August to late-September, the $2.70-$2.75 support zone had been defended by the XRP buyers.
This level gave way during the 10/10 crash, and XRP has been in a downtrend since. The lower highs since November were marked to highlight the bearish price structure.
The $1.90 and $1.61 levels were weekly supports from June and April. The price slipped below $1.90 in recent days and was fighting to reclaim it as support.
Even if the bulls succeed, the swing trader bias should remain bearish. This was due to the structure and the OBV’s inability to make new highs, another indication of weak demand.
The less likely scenario – A bullish XRP breakout
An XRP move past the $2-$2.05 supply zone, alongside a strong bullish breakout for Bitcoin past $94.5k, would signal a potential XRP uptrend.
This scenario is less likely due to the lack of demand for BTC and XRP.
Traders’ call to action – Sell the bounce
Source: XRP/USDT on TradingView
If the lack of demand continues, buyers will lack the strength to drive price moves. A price bounce would be for selling. An XRP bounce to the $1.95-$2.0 supply zone would offer a feasible selling opportunity.
Short sellers can look to enter positions, with invalidation being a move past the $2.05 level.
Final Thoughts
- The short-term XRP gains were likely driven by Bitcoin’s attempts to climb above $90k, yielding market-wide price bounces.
- Swing traders and investors can remain bearish on XRP due to the longer-term price trend and the lack of demand.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion