Market Direction

XRP's momentum meets a roadblock: Is a pullback on the horizon?

Updated: Jul 25, 2024

Published: Nov 7, 2023

It’s a big move for XRP, now fighting at one of its most major horizontal resistances. XRP is throwing punches to break through a ceiling that's as tough as they come. But the question in the air is whether XRP can deliver a knockout blow or if it's about to take a tumble. Let’s figure out what’s next.

TLDR

XRP is currently grappling with a significant resistance level at $0.70.
Support for XRP is critical in the $0.62 to $0.64 range, which must hold to avoid a bearish turn in the short to medium term.
Mechanics suggest the market is leaning too far into long positions, which could lead to a sharp correction.
We think the overheated long market is poised for a potential pullback.

Disclaimer: Not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results. “One Glance” by Cryptonary sometimes uses the RR trading tool to help you quickly understand our analysis. They are not signals, and they are not financial advice.

Technical analysis

Yesterday, XRP moved into a key resistance at the $0.70 area. Initially, we’ve seen price get rejected from this level, and we now find a battle on our hands to get back above and comfortably close above the $0.70 level.

The major support remains between $0.62 and $0.64; XRP must hold this level in the short and medium term.

The mechanics are where the major movement can come from, so let’s dive into that below.

XRP 1D

Market mechanics

The RSI on the daily and the 3D are overbought, although the 3D is just overbought. This would suggest the need for some caution, even though we’re not currently at alarming levels.

If we look at the funding rate, we can see that it’s very positive.

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Alongside this, the open interest is big. This shows that longs are paying a large premium to shorts. An overly long market is vulnerable to a flush-out. This looks very overheated here, and we’d be more than cautious as this is ripe for a flush out of these longs - meaning price will likely go lower.

Cryptonary’s take

For XRP, we’d be very cautious here. Price has moved into a major resistance at $0.70 and has initially been rejected from this level. Alongside this, we’ve seen leverage significantly increase with longs ape’ing in. This is not a healthy setup, and we’d expect to see a more meaningful pullback here, with a price target of $0.62 to $0.64.