XRP is once again attempting to recover the critical level of $3. The current price of the token is $2.82, which is down more than 0.50% in the last 24 hours. Despite this setback, market observers feel XRP will still have room to rally if buyers are able to hold key support levels.
Source: CoinMarketCap
Analyst CryptoBusy pointed out that a new bullish setup is apparent on XRP’s price chart. The subsequent formation of a falling wedge along with the steady support at $2.70, shows the potential for a breakout.
Also Read: XRP Price Prediction: Is a Bullish Break Above $3.40 Coming Soon?
Typically such technical patterns have been the precursors of powerful rallies, and in this case the target is around $3.66. If resistance is breached decisively, further gains may be possible in the weeks to come.
Source: X
However, the market is not a unipolar one. While token has been successfully defending the $2.70 level multiple times, momentum still doesn’t look strong. The chart still shows the pattern of lower highs and lower lows and that is generally considered an early warning.
If the token breaks below its $2.70 base decisively, you can expect to see new focus on the next key support zones of $2.46 and $2.21. Those levels would serve as a second line of defense before the deeper correction forms.
A very conservative tone is further enhanced by whale activity. Santiment data shows that large holders on the blockchain holding between 10 million and 100 million tokens have been dumping. Their proportion relative to the total supply has dropped from 13.12% in the end of July to a mere 11.88% today.
Source: Santiment
Even on-chain metrics are looking fragile CryptoQuant claimed that there has been a huge decrease in network activity with the number of active addresses on the XRP Ledger dropping 54% since mid-July. The number of active wallets per day has also fallen from about 50,000 on July 18 to about 23,000 this week.
Short term pullbacks could provide appealing entry points for sidelining buyers. However, if it does rally and coin crosses back above the $3 level, that could lead to a relatively rapid reinstatement of confidence in the token, leading to a demand-driven bottom line.
Source: CryptoQuant
But the path forward is still unclear. It will depend heavily on whether buyers can continue to defend support at $2.70 and build enough strength to take the move above resistance. A breakdown of key levels would see XRP drop to $2.21, but a rally near and above $3 may reset sentiment in favor of the bulls.
XRP has reached something of an inflection point. With price action oscillating between a technical buy and bearish pressure, traders are keeping their eyes on the prize in anticipation of whether the token can rebound or succumb to another round of selling. The $3 level has also become a battle, which is the near-term and sole defining test for token.
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