The price of Project Ripple’s XRP token may have started a new downward movement due to this bounce and subsequent decline. This scenario is supported by both the behavior of the Relative Strength Index (RSI) and the results of wave analysis.
YouTube feed
.
Ripple rebounded from long-term resistance
Technical analysis shows that XRP has made three unsuccessful attempts since September 2022 to break a long-term resistance of $0.53. Because it lasts so long, it represents a very important area of resistance. A breakout above that could significantly accelerate the pace of growth.
For the past two weeks, two bounces on the chart have produced candles with a long upper wick (indicating pressure from buyers). As a result, the price of XRP negated nearly all of the gains made in May in June.
Source: TradingView
The Relative Strength Index (RSI) indicates further downside potential. Traders use RSI as a momentum indicator to assess whether a market is overbought or oversold, helping them decide whether to buy or sell an asset.
When the RSI is above 50 and the trend is upward, the bulls have the advantage, and vice versa. Although the RSI is currently above 50, it is declining, indicating weakness.
While the RSI is currently above 50, it is declining.
In addition, the RSI is showing signs of a bearish divergence, which often portends a decline.
The presence of this bearish divergence inside an important resistance area, combined with a bearish candle, increases the likelihood of an impending bearish trend reversal.
The outlook for XRP does not look good
In the meantime, a wave analysis of the daily timeframe shows that the price of XRP has reached its highest point and is now expected to decline in July.
The movement of XRP during this year’s rise has clearly formed a three-wave structure (white), indicating a potential correction.
The price decline in April and May was a five-wave pattern (highlighted on the chart). Therefore, if this wave analysis is accurate, XRP is now in another five-wave decline (black) with a likely low around $0.40.
If both declines are of equal length and magnitude, XRP will bottom around July 25 at $0.39. It should be stressed that this is only a theoretical and rough estimate.
A more accurate prediction will depend on how the coin’s movement develops further.
Source: TradingView
In spite of this bearish outlook for XRP, a rise above the high of the second sub-wave (red line) at $0.53 would indicate that the trend is still bullish.
In that case, the price of the token could rise quickly to the next resistance at $0.90.
.