In a single session, XRP's vicious false breakout erased days of cautious optimism, sending a harsh lesson to overleveraged bulls. The asset promptly retraced after eventually breaking through the resistance zone around $2.30, closing the daily candle below the breakout level. Long positions were forced to give up as a result of the move, which set off a wave of liquidations and demonstrated how brittle bullish momentum remains in the current climate.
If you look closely at the chart, you can see that XRP has been forming a rising wedge structure since mid-June. It has been grinding higher while being squeezed between the cluster of moving averages overhead and trendline support. After a brief escape from that squeeze yesterday, it briefly rose above $2.30 on rising volume, which at first glance appeared encouraging.
Nevertheless, price action sharply reversed rather than proceeding. In the end, this volume increase was a bearish signal that confirmed distribution as opposed to long-term accumulation. The 50 EMA line is another concerning technical factor; it is currently beginning to roll over and cross downward toward the 100 EMA. Convergence of this kind typically indicates waning underlying momentum and is a sign of deeper corrections.
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Moving averages are lining up as dynamic resistance above is making it harder for XRP to overcome the technical backdrop. The market may not be overbought or oversold if the RSI stays at or near 55. That is to say, there is still a lot of opportunity for further declines, particularly if pessimism gains traction. Traders should pay close attention to whether XRP can maintain support between $2.10 and $2.20.
The next logical support may be much lower if this zone collapses, which could lead to a wave of stop-loss selling. The failed breakout has, for the time being, restored skepticism everywhere. It appears premature to expect a sustained rally until XRP can decisively retake the prior highs with strong volume confirmation. The clear reminder that the market still has unresolved business, shaking out weak hands, has been given to bulls — who were expecting an explosive continuation.