Ripple’s XRP is treading on thin ice as bearish bias against the token strengthens. Amid this week’s broader market lull, XRP has dropped nearly 7%. It has slipped below the $3 threshold and is extending its downtrend.
With bullish sentiment waning and selloffs climbing, technical indicators now point toward a potential decline to a three-month low.
XRP’s Short-Term Outlook Turns Bleak
XRP’s dip over the past few days has pushed its price below the 20-day Exponential Moving Average (EMA), which forms dynamic resistance at $2.9065.
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XRP 20-Day EMA. Source: TradingView
The 20-day EMA measures an asset’s average price over the past 20 trading days, giving more weight to recent prices.
When an asset trades above its 20-day EMA, it indicates that bulls are in control and that short-term momentum favors the upside.
Conversely, when the price falls below this level, as XRP has, it suggests that selling pressure is intensifying and that the market’s short-term outlook has turned bearish.
Furthermore, on the daily chart, XRP’s Elder-Ray Index continues to show persistent negative readings, indicating weakening bullish momentum. For context, the sizes of the red histogram bars that make up the indicator have gradually increased in the past four sessions, signaling an uptick in sell-side pressure.
XRP Elder-Ray Index. Source: TradingView
The Elder-Ray Index indicator measures the strength of bulls and bears in the market by comparing buying pressure (Bull Power) and selling pressure (Bear Power). When the value is positive, the market is experiencing more buying pressure than selling, suggesting a potential uptrend.
On the other hand, when its value is negative this way, the bears have the upper hand, and token selloff is strong among market participants.
XRP Balances on the Edge
XRP currently holds above the support floor at $2.7435. If the current bearish momentum holds, the altcoin could soon retest this level. A break below this support floor could push the token to $2.6371, a price level not seen in the past three months.
XRP Price Analysis. Source: TradingView
On the other hand, a resurgence in buyer interest could push the price back above $2.87 and potentially trigger a short-term rebound toward its 20-day EMA at $2.9061.
