XRP/USD over the last two sessions has stabilized somewhat but continues to nurse losses. The bulls sent out false hope on Sunday, after the price formed a reversal-looking long-legged doji candlestick. Buyers strongly defended a free-fall towards the $0.20 price territory. Investors are still desperately trying to pinpoint a bottom area for XRP but given the overall negative sentiment across the entire market, this remains unclear. Of course, XRP’s downtrend has been largely divorced from its positive fundamental developments, a sign that overall bearish pressure remains strong.
The price has already been punished a big 35%, with the bears taking full control on 7th November to drive XRP/USD south. A move coming after the price breached a larger pennant pattern formation, as previously mentioned. XRP had been confined within this structure since the back end of September. Since the breach from this structure, during the last 8 trading sessions the bears have managed to force 6 negative closes, demonstrating how strong this trend is.
As mentioned above, with the recent stabilization, this really came into force after the 25th November price bounce. XRP/USD entered another form of consolidation but remains very much vulnerable still. Price action has formed another bearish pennant pattern, as seen on the 4-hour chart view. This stacks in the favor of the bear camp. A breakout seen from this formation could be punishing, leaving the door open to another wave of selling.
Looking to the downside, just tracking below the pennant structure, sees a demand area. This can be seen running from the $0.3500 figure, down to $0.3300 (Sunday low region). Any break below here and judging from the price behavior within the mentioned pattern, the fall could be hard, leading to the next major area. Recapping back to the last article, $0.3000-$0.2500 would be where large buying could swoop in, as previously proven.
Should the bulls manage to defy the odds which are currently stacked against them, then the upper resistance of the pennant needs to be breached. Otherwise, XRP/USD is victim to the hard fall which is anticipated. A breakout of the $0.3750 level could gain much traction with further buyers. As a result, $0.4500 come back into play. Further north, eyes would be on a retest of the larger broken pennant, to move back into the psychological $0.5000 territory.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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