One of the top three largest cryptocurrencies in the world, XRP, crashed 11% recently, as the whole crypto market crashed today. Reportedly, bullishness for the token has died out after a steep two-week rally, peaking at an all-time high (ATH) of $3.40. XRP is currently trading at $2.78.
The potential downside is indicated, among other things, by price divergence, which has turned into a sell signal. Although XRP has recorded a recent bullish price action, the number of active wallet addresses interacting with the token has decreased. This decline in participation shows that investor interest may be dwindling, which is crucial for a sustainable uptrend.
A bearish crossover in the MACD indicator adds to this pessimism. This technical signal indicates a waning of market momentum shortly after XRP’s surge to its ATH. Without robust buying pressure and some weakened investor activity, XRP could be susceptible to a price correction.
Price Outlook: Stabilization or Another Drop?
At $3.11, XRP seems to be stabilizing, for the moment. But analysts say the support may not last. Bearish readings on both the DAA Divergence and MACD indicators suggest XRP may pause at $2.73, making headway below the key $3.00 threshold. Such a falling back could furnish a more solid base for the token to reclaim upward momentum further down the road.
Although the near-term sentiment seems negative, a change in market dynamics may spark bullishness again. If XRP breaks above its recent ATH of $3.40, the current bearish trends would be invalidated and new highs would be in play. It would need more market participants and a revival of investor confidence.
Overall, the recent price drop of XRP shows a very shaky bullish scenario for the token. However, the drop in active participants and technical signs of deterioration indicate a near-term sell-off is possible. That said, whether the token can reach its previous ATH or new highs will depend on wider market dynamics and a resurgence in investor activity.
Also Read: Crypto Market Crashes Over Weekend, Bitcoin Drops to $99K
