Over the last seven days, XRP has undergone a significant depreciation, shedding approximately 13% of its value and wiping out the gains it accrued following the November election period. Despite this downturn, sentiment analysis sourced from Santiment indicates a contrastingly positive outlook from certain segments of the trading community.
After a major pullback in the cryptocurrency market, prevailing attitudes toward leading digital assets Bitcoin and Ethereum have turned decidedly bearish. However, XRP appears to deviate from this trend, with data showing an increase in optimistic sentiment among its traders. This divergence is notable, as it counters the general decline witnessed in the broader crypto market.
Interestingly, market behavior often moves inversely to the prevailing fear and optimism of retail traders. Historical patterns suggest that when retail investors demonstrate bullishness toward XRP amid a generally bearish crypto environment, this can foreshadow continued downward pressure rather than a market bottom. Santiment's analysis supports this, asserting that a short-term relief rally is plausible so long as skepticism toward cryptocurrency remains predominant among small traders.
From a technical standpoint, XRP has suffered a decisive failure by breaking through a significant support zone between $1.62 and $1.73, a level that had served as a price floor for several months. This breach marks a structural shift in XRP's market dynamics, reflecting a breakdown of a critical accumulation area and indicating a bearish trend resurgence.
Further emphasizing the severity of this decline, all the key exponential moving averages (EMAs) are positioned above XRP's current trading price. Specifically, the 20-day EMA stands at $2.08, the 50-day EMA at $2.17, and the 100-day EMA at $1.73. The presence of a considerable gap between these moving averages and the current price underscores the downward momentum. Notably, the 100-day EMA, which previously offered price support, has now been crossed to the downside.
Attention now centers on the psychological price mark of $1, a critical support level for XRP. Should the price fall below this threshold, it may induce panic selling, potentially accelerating the decline toward the $0.50 to $0.70 support zone. The Relative Strength Index (RSI) currently registers at 30.17, indicating that XRP is nearing oversold territory. Although this suggests the asset is approaching a price exhaustion point, it is important to acknowledge that RSI can remain depressed for extended periods during strong bearish trends.
On the resistance front, the immediate barriers correspond to the previously broken support between $1.62 and $1.73, which now acts as a resistance zone, followed by the psychological resistance near $2.
XRP's rally in the wake of former President Donald Trump’s election victory in November 2024 initially propelled the token toward the $3.50 mark, with the peak price reaching $3.65 in July. However, the token has experienced a persistent downtrend since, which has recently intensified, resulting in the notable declines observed today.
This period of heightened volatility presents opportunities for short-term trading strategies that capitalize on rapid price movements, including sharp selloffs and sudden rebounds. Traders closely monitoring these fluctuations aim to identify timely setups and often conclude trades within a matter of days to maximize returns amid market turbulence.
Overall, XRP's recent price action reveals a landscape characterized by significant technical breakdowns and mixed trader sentiment. While optimism among retail investors persists, technical indicators and broader market context highlight potential risks for further downside moves in the near term.