Although XRP has finally approached the much-anticipated $3 mark, it has not been able to reach it yet. XRP is exhibiting some troubling indications that momentum may be waning just as traders were expecting fireworks, peaking at $2.97 before a slight pullback. The price action appears impressive at first glance – XRP has increased by over 30% in a few days, and volume has increased in tandem.
All significant moving averages have been decisively cleared by the asset, and resistance zones that had been limiting price movement for months have been reversed. Zooming in on the most recent candles, however, tells a different tale of hesitancy, indecision and increasing difficulty, maintaining the same upward momentum that pushed XRP to this point.
The $3 level is a significant historical barrier that ought to have been breached with greater force. It is uncommon for powerful breakouts to spend this much time consolidating fractions of a dollar below crucial thresholds. Rather, they swiftly cut through them, and sustained volume and follow-through buying pressure validate the breakout. Unfortunately, this is not the case for XRP, which is struggling to move above the aforementioned level.
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This extended grind below $3 regrettably suggests that the rally may be overextended and worn out. Above 80, the RSI is currently in extremely overbought territory, a level that is rarely maintained without a strong retracement. Long upper wicks on daily candles are beginning to appear, which is an early indication that profit-taking is quickening. It is unlikely that XRP will reach $3.
Since it is already so close, there is still a good chance that it will eventually tag or even surpass that level, if only to sweep liquidity and stop orders that are just above. When that occurs, however, the price's current behavior indicates that it might signal the end of this leg rather than the beginning of a new one.
Even if XRP makes a significant breakthrough soon, a steep decline may occur shortly after due to the inability to clear $3 decisively on the first try.
