At present, XRP is contending with a bearish trade setup marked by unabated resistance, strong selling pressure and clear bearish indicators displayed on its futures market. Noted crypto analyst Dark Defender has found key support and resistance levels that may dictate the crypto’s next big move. Though recent price action has cast a grim picture, Dark Defender stays bullish on XRP’s capacity for restoration.
Key Levels to Watch
Crypto strategist Dark Defender has identified $2.22 as a key support area for XRP to hold. A clear close below this level will indicate that the downtrend is resuming with more downside likely. In this price action, Dark Defender suggests the risk area of $1.94 low on February 28 and the range low at $1.89. This is an area that is a clear opportunity for doing better. According to the analyst, $3.39 is the most important resistance level. XRP needs to overcome this resistance level to gain momentum for a long-term bullish rally.
Watch the Feb. 28 low of $1.94. The range low at $1.89 is another important level for traders and investors to keep a close eye on. These levels may serve as future lines of support, where bullish sentiment might step in and stop any further price drops in their tracks.
Bearish Technical Indicators
XRP’s price action on the four-hour candle chart has printed a curious inverted V-shaped pattern. This admittedly technical indicator is almost always a harbinger of an incredibly sharp increase in price, thwarted by an equally aggressive drop. This recent pattern looks alarming and may mean that the recent upward momentum is indeed unsustainable. The supplier congestion zone between $2.35 and $2.42 is a heavy hurdle to overcome. It is preventing XRP from having a breakout above those levels.
The 100-period simple moving average (SMA) and the 200 SMA lie inside this supplier congestion zone. All of this continues to feed a decidedly bearish sentiment in the market. These three moving averages routinely serve as dynamic resistance levels, adding to the challenge XRP faces in trying to clear this overhead pressure.
Futures Market Signals Caution
XRP has experienced most of its futures markets with negative funding rates at the moment. Moreover, open interest (OI) is on a downward trend, flashing caution lights for the crypto asset. For context, negative funding rates mean that short sellers are paying long holders, which demonstrates bearish sentiment among traders. A drop in open interest means that there are less active traders on XRP futures’ market. This lack of participation can then cause increased volatility and larger price movements.
In light of these challenges, Dark Defender is optimistic that the case’s biggest correction for XRP is already done.
“The primary correction on the weekly, daily frame and 4-hour structure is over for XRP” - Dark Defender
That analyst sees a glimmer of hope and has set a pretty customarily high target.
“started Wave 1 with an aim of $5.85.” - Dark Defender
