XRP has continued its downward trend, declining by 10% last week. The downward momentum is strengthening.
The fourth-largest cryptocurrency by market capitalization is facing pressure as buying interest has decreased, suggesting the possibility of further losses.
Deteriorating XRP Outlook...Reduced Buying Pressure
After reaching an all-time high of $3.40 on January 16, XRP has mostly remained within a descending parallel channel, which is a bearish pattern that forms when an asset's price moves between two downward-sloping parallel trendlines.
When an asset's price trades within this channel, it indicates a bearish period with selling pressure dominating and low buying activity, which has exerted significant downward pressure on XRP's price in recent months.
XRP is currently trading at $2.11 and is below the 20-day Exponential Moving Average (EMA), which places more weight on recent prices and reflects the short-term trend.
When an asset's price falls below the 20-day EMA, it suggests strong selling pressure and a bearish trend, indicating that the downward momentum of XRP will likely continue unless buying interest increases to push the token's price back above the EMA.
Additionally, XRP's Chaikin Money Flow (CMF) is currently in a downtrend and is poised to fall below the 0 line. This indicator measures the flow of money into and out of the asset, and it is currently at 0.02.
When an asset's CMF approaches or falls below 0, it reflects weakening buying pressure and increasing selling dominance, suggesting more money is flowing out of XRP than in, further strengthening the bearish outlook.
XRP Facing Downward Pressure...Could It Plummet to $1.47?
XRP is at risk of falling below $2 if new demand remains minimal. In such a scenario, it could plummet to the $1.47 level last reached in November.
However, if selling pressure eases and XRP shows an increase in buying activity, the price could break above the $2.81 resistance and target the all-time high of $3.40.
