The market momentum of XRP has stalled since Friday, with trading activity cooling down and price volatility moving sideways. After a slight increase at the beginning of the week, this token currently shows signs of decreasing volatility and weakening demand, raising concerns about the risk of a bearish trend.
XRP price is moving sideways, but sellers may soon take the upper hand.
Data from the 1-day chart shows XRP has been fluctuating in a narrow range over the last three trading sessions. Since Friday, XRP has faced resistance at $3.30 and found support at $3.22.
Previously, from August 3 to 7, the price had a 4-day increasing streak, rising a total of 20%. The current sideways trend reflects reduced market volatility, indicating that buying and selling pressures are relatively balanced.
During such periods, the market is often in a 'wait and see' state, as traders expect a catalyst to emerge to determine the next direction of the price.
The decrease in volatility is also clearly reflected in XRP's Average True Range (ATR), which has decreased by 10% since August 7. ATR measures the level of price fluctuation over a certain period and a declining ATR indicates calmer market conditions with lower volatility.
Although low volatility periods often suggest a stable market, they can also mean that traders are becoming less active. This is often a precursor signal for a strong breakout in either direction.
Moreover, the Elder-Ray Index for XRP further reinforces the possibility of a bearish breakout. This indicator measures the strength of buyers (bull power) and sellers (bear power) by comparing price movements to the moving average.
On the daily chart of XRP, the Elder-Ray Index has consistently shown green histogram bars (indicating buying strength), but their size has been gradually decreasing over the past few days.
This contraction signals that buying momentum is weakening and creates an opportunity for sellers to take control, pushing the price of XRP lower.
XRP faces a decisive moment in the range of $3.22 – $3.66
Strong selling pressure could trigger a breakdown below the support area of $3.22. If this happens, the price of XRP could extend its decline and fall to $2.99.
However, if new demand emerges, XRP could break through the 'price wall' at $3.33. A successful breakout would open up opportunities for an upward trend towards $3.66.