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As the cryptocurrency market faces volatility, XRP has witnessed a key technical event: the formation of its second death cross in the year 2024.
This development has caught the attention of traders and analysts who are weighing the potential implications of such a formation.
A death cross occurs when a short-term moving average, such as the 50-day moving average, crosses below a long-term moving average, like the 200-day moving average, and is typically regarded as a bearish indication. For XRP, this is the second time such has manifested within the year, following the first in late January.
While death crosses often indicate a potential sell-off, the opposite seems to always be the case for XRP, with the formation of a death cross indicating major or interim bottoms.
Following the first death cross of 2024, XRP experienced a bottoming phase, which was followed by a recovery that saw the price reach highs of $0.748 approximately three months later. This might be because the price might have already been oversold by the time the death cross emerged.
This historical narrative offers a glimmer of hope to investors who wonder if a similar pattern might play out after this second death cross.
At the time of writing, the XRP price was down 2.49% in the last 24 hours to $0.494 as the broader crypto market faced selling pressure ahead of the Federal Reserve’s meeting, which is scheduled to begin Tuesday and end Wednesday with a new interest rate decision and press conference.
Investors are expecting guidance on the outlook for interest rates, as worries about when rates will be cut and how many cuts may occur this year have been top of mind.
Markets had hoped that rates would be cut as early as June, but this schedule has been pushed back to September after recent economic data indicated that inflation is persistent and the economy remains resilient.
The present market outlook adds to the uncertainty about the implications of a death cross formation for XRP. If declines persist, XRP's next major support is envisaged at $0.467, which has formed a base for the XRP price rebound twice in April. On the other hand, a break above the daily moving averages of 50 and 200 might be the first sign of strength for the XRP price.