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The XRP price has now returned to a bearish stance after a notable surge on the daily chart that hinted at potential bullish momentum. Crypto analyst Master Ananda highlights this in a post indicating a concerning trend in the XRP price chart. If this trend persists, the future of XRP, particularly in the short term, becomes more uncertain, with bears gaining more control.
4 Green Daily Closes Lead to Nothing
After a crash alongside the overall crypto market, the XRP price experienced a recovery that seemed to set it back on course for a rally. This resulted in the first green daily close at the end of May, continuing into June. The first three days also closed in the green, marking four consecutive daily green closes, typically a bullish sign for the price.
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However, a crucial aspect of the trend necessary to confirm a bullish move was incomplete, concerning volume. As noted by Master Ananda, a volume spike was expected as the XRP price established a higher low, indicating the momentum required to drive the price upwards. Yet, the volume did not follow this expected pattern, instead dropping significantly and remaining subdued.
The absence of anticipated volume suggests weakness surrounding the XRP price, as evidenced by the subsequent red close for the altcoin on the first day of June. If this lack of momentum persists, the price may continue its downward trajectory.
Currently, resistance is building at the 0.382 Fibonacci level, at $2.2959. To initiate a price recovery, this resistance must be overcome with a surge in volume. Otherwise, there is a risk of a decline back to the 0.236 Fibonacci level, potentially breaching the $2 mark.
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Potential Decline in XRP Price Due to Dwindling Volumes
Recent data from Coinglass indicates a significant decline in XRP volume. Throughout June, daily volume has remained below $5 billion, resembling figures seen during the bear market when prices were falling. This decline suggests reduced investor participation amid cautious market conditions.
Interestingly, open interest remains relatively high at $3.94 billion, indicating active crypto traders’ positions on the XRP price. However, the majority are betting on a further decline in the XRP price, as Coinglass data reveals 52.75% of positions being short, compared to only 47.25% expecting an increase.
Featured image from Dall.E, chart from TradingView.com