Will XRP Return at $0.5? DXY Golden Cross Can Send Crypto Down, Cardano Turns off Bullish Mode

Will XRP Return at $0.5? DXY Golden Cross Can Send Crypto Down, Cardano Turns off Bullish Mode

XRP is currently facing a critical crossroads. The question is whether XRP can maintain its position at the $0.5 mark or if the recent breakdown below multiple moving averages signals a more substantial retreat.

At a glance, the XRP chart displays a troubling picture for bulls. The asset has recently faltered below several key moving averages, which traditionally act as layers of support. The 50-day, 100-day and 200-day moving averages have now turned into resistance levels, which XRP would need to overcome to reclaim bullish momentum. These moving averages, particularly the 200-day, are closely watched by traders and can often dictate the medium to long-term trend direction.

The current resistance levels are set near $0.5587 and $0.5850, which represent recent local highs and the proximity of the 50-day moving average. A successful break and close above these points could signal a potential reversal of the recent downtrend. Conversely, the support levels to watch are at $0.4700 and $0.4500, where buyers have historically shown interest.

If XRP can consolidate and push back above the $0.5 threshold, it would need to sustain the upward movement and close above the aforementioned moving averages. This could instill confidence among traders, potentially igniting a rally toward higher resistance levels.

Dangerous growth

The U.S. Dollar Index serves as a barometer for the strength of the dollar against a basket of foreign currencies and often has an inverse correlation with the cryptocurrency market. Recently, technical analysts have been eyeing the formation of a “Golden Cross” on the DXY chart — a bullish signal where the 50-day moving average crosses above the 200-day moving average. If this pattern comes to fruition, it could spell trouble for the cryptocurrency market, traditionally sensitive to a strengthening dollar.

The DXY chart currently shows the index hovering around the 103.87 mark, with the 50-day moving average creeping toward the 200-day moving average. A Golden Cross formation would typically indicate that a long-term uptrend is on the horizon for the dollar, suggesting increased buying momentum.

The link between the DXY and cryptocurrencies is evident; a stronger dollar often leads to a decrease in the price of digital assets like Bitcoin and Ethereum. Investors typically flock to the security of the dollar in uncertain economic times, which can result in a pullback for risk-on assets like cryptocurrencies. If the Golden Cross in the DXY indeed materializes and triggers a dollar rally, the cryptocurrency market may see a corresponding downturn as capital flows out of digital assets and into the traditional refuge of fiat currency.

Cardano no longer bullish

Cardano has recently exhibited signs of a trend reversal, stepping out of its bullish mode. This shift in momentum has prompted discussions among investors and traders as they reassess the asset’s near-term prospects.

After a period of sustained upward movement, ADA has broken below its rising channel, a structure that typically signifies bullish sentiment. This breakout to the downside indicates a potential shift to bearish momentum or at least a pause in the uptrend. The price is now hovering around $0.575, just below the lower boundary of the former channel, suggesting a possible new resistance level.

Looking at support levels, the immediate one is at $0.5385, which is critical for ADA to hold to prevent further declines. A break below this support could lead to a test of the next support level at around $0.5112, where the 50-day moving average may offer some buoyancy to the price.

Cardano’s current trajectory points to a cooling-off period following its exit from the bullish channel. The volume profile shows a decrease during this downturn, potentially signaling a lack of conviction among sellers. However, for ADA to regain its bullish stance, it would need to reenter the channel and sustain a push above the $0.60 mark, challenging recent highs around $0.68.