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XRP is presently exhibiting signs of fragility as its recent price trends are turning increasingly bearish. After making an effort to regain upward momentum above $ 2.60 in May, the cryptocurrency has faced challenges in sustaining this trajectory, and its recent price movements have brought it near the brink of losing the $2.10 price point.
Significantly, the price movements have led to the creation of a head and shoulders formation on the daily candlestick chart. This could potentially be the final trigger that causes the XRP price to crash beneath $2.
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XRP Breaks Head And Shoulders Neckline
As noted by a crypto analyst on the social media platform X, XRP has now established a classic head and shoulders pattern, with clearly defined symmetry between the left shoulder, head, and right shoulder. The head and shoulders pattern began to emerge in late April, when the price rose to $2.26 to form the left shoulder of the structure. In early to mid-May, XRP spiked above $2.60 to create the head of the structure and what appeared initially to be a revival of strong bullish momentum.
The rally lost momentum shortly after hitting that May high, and the price began its decline once more. By June 3, XRP attempted again to climb, reaching $2.27, representing the formation of the right shoulder. However, this upturn was insufficient, and the subsequent price movements have shown sellers gradually gaining control.
The head and shoulders formation, often linked with trend reversals, became more concerning once XRP dipped below the neckline around the $2.18 level, reaching as low as $2.07 on July 6. Interestingly, the breach below the neckline was accompanied by surging volume, which lent extra validation to the bearish indication.
EMA Rejections For XRP: What Lies Ahead?
Having breached the neckline, the $2.18 to $2.20 area is turning into a solid resistance zone for any recovery attempts. The daily candlestick chart indicates XRP remains trading below both the 9-day EMA and the 50-day SMA, currently positioned at $2.1877 and $2.2649 respectively.
Notwithstanding a slight recovery over the last 24 hours, XRP has persistently struggled to reclaim the 9-day EMA since the neckline break, demonstrating ongoing weakness in the short-term scenario.
As long as XRP remains trapped beneath the neckline and the EMA/SMA resistance cluster, the prevailing structure tends to favor an extension downward. Based on the head and shoulders pattern, a measured move from the neckline breakdown suggests a decline toward the $1.85 to $1.80 range.
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At the time of this writing, XRP is trading at the neckline resistance once again at $2.18 following a 2.6% gain in the previous 24 hours from $2.13. However, the strength of this rebound is uncertain, given that it has occurred alongside a significant 48.14% decrease in trading volume. The upcoming 24 hours will be crucial, as price movements around the $2.18 to $2.20 area could dictate if XRP continues its drop and breaks below $2.
Featured image from Unsplash, chart from TradingView
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