The XRP price appears to be on a recovery track, however, it has encountered a significant roadblock as it approaches the $0.55 barrier. This barrier has been a substantial resistance since last year, limiting any bullish growth and creating a high supply zone for traders. The fact that XRP is still struggling to breach this barrier suggests that sellers continue to defend it, which may lead to a temporary correction in the near future.
As evidenced in the daily time frame chart, the XRP price has failed numerous times to surpass the multi-month resistance at $0.55. Struggling green candles indicate that we may be in the distribution phase. This situation has led to an 11% decline in the coin price, landing at the local support of $0.486. At the time of writing, XRP trades at $0.4886 and hovers just above this local support level.
If the $0.486 support remains intact, the overall recovery sentiment should persist. However, should the XRP price fall below this level, a further 8% drop to $0.447 may occur. It is evident that the increasing supply pressure at $0.55 is pushing XRP towards a bearish reversal. Such a decline could lead to the next significant demand zone of $0.486. The daily chart reveals that this level aligns with the 50-day EMA and the 50% retracement level, creating a robust accumulation zone and reducing the likelihood of a breakdown.
Now, what does this mean for the market sentiment? The Super Trend indicator in the daily chart suggests that the overall sentiment is positive. However, it is essential to consider other factors as well. Despite sideways action, the daily Relative Strength Index (RSI) slope shows a noticeable decline indicating that underlying selling pressure is on the rise, supporting the potential for a correction.
In conclusion, while the XRP price appears to be on a recovery trajectory, the persistent resistance at the $0.55 level poses a significant challenge. The growing selling pressure may trigger a temporary correction, further prolonging the road to recovery. As always, it is crucial to conduct thorough market research prior to investing in cryptocurrencies, as market conditions are continually changing, and personal opinions should not solely dictate one’s investment strategy.
Source: Coingape
