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- XRP price is down 4% on the day as bears forged a rejection near $0.420.
- XRP price could decline toward $0.365 based on recent bearish signals.
- A breach above $0.328 would invalidate the bearish thesis.
XRP price validated last week's bullish trade by breaching $0.420. Now the same target area is acting as resistance, setting up a downswing toward the origin points of the previous rally.
XRP price could sweep the lows
XRP price is experiencing backlash since breaching last week's bullish target zone. After hovering within the $0.42 zone for two days, the bears denied entry into the 43 cents barrier, causing a 4% decline back into the $0.40 zone. The downward move, which Is now the largest red day of 2023, could be the start of a much steeper retracement.
XRP price currently auctions at $0.40. The Relative Strength Index (RSI) is an indicator used to forecast market bottoms and tops by assessing previous rallies. The RSI has a classic M shape pattern at the 70 level. The M-shaped formation, which is bearish, also printed a bearish divergence between the recent swing highs at $0.40 and $0.42. Combining these factors, there is a strong confluence that the XRP uptrend, which began on January 1, may have ended.
If the market is as genuinely bearish as it seems, then a breach of the 8-day exponential moving average at $0.39 could be the catalyst of a decline toward lower liquidity levels. Key target zones to aim for would be the 21-day simple moving average at $0.370 and the swing low at $0.365 established on June 14.
XRP/USDT 1-day chart
The bears may be able to use the recent swing highs at $0.428 as a marker to invalidate the bearish thesis. A breach of the aforementioned level would induce further upside momentum targeting the broken support zone at $0.44. The XRP price would incline by 10% if the bulls were to succeed.