The XRP market has been exhibiting a head and shoulder pattern for the second half of 2022, which is often seen as a bearish signal indicating a potential decline in price. This pattern occurs when buyers are unable to push the price higher after reaching a certain level of support, known as the neckline, leading to a downward trend. However, a bullish indication hints at a bounce back in 2023.
- A head and shoulder pattern govers the XRP price action
- A bullish breakout from $0.4 will undermine this bearish pattern
- The intraday trading volume in the XRP price is $372.1 million, indicating a 50% loss.
Despite the recent bullish recovery reaching the heights of the 50-day EMA, the XRP market price takes a bearish turn to create a bearish pattern coming in the long term. In the month of December, the market value of the refill token has plunged by 16.5% and trades slightly below the mark of $0.35.
Coming back to the long term pattern, the price trend shows a head and shoulder pattern forming in the daily chart with the neckline at $0.31-0.3. The neckline gets credibility by acting as a strong support level during the consolidation phase between June and October.
Continuing the falling trend under the bearish aligned EMAs, the market value may soon succumb below the neckline highlighting a bearish entry point.
In such a case, XRP investors can witness further decline in market price, potentially a drop of 37% to the next support level at $0.18.
On a contrary note, if the new year brings new investors for ripple, a reversal above the neckline crossing the $0.40 mark will break the bearish hypothesis.
Additionally, to support the bullish reversal a double bottom pattern is evident within the right shoulder of the bearish pattern.
Considering, the bulls get momentum in 2023, a double bottom breakout can revive the XRP buying spree.
EMA: undermining the recovery in November and December, the crucial daily EMAs- 20, 50, 100, 200 maintain a negative trend displaying a long term bearish phase in action.
Relative strength indicator: the RSI slope shows a short-term decline from the midline but the bullish divergence in the double bottom pattern keeps the hope burning for XRP buyers.
XRP intraday price levels
- Spot price: $0.344
- Trend: Bearish
- Volatility: High
- Resistance level- $0.373 and $0.41
- Support level- $0.31 and 0.26
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