- Ripple (XRP) faces selling pressure as profit-taking by holders and bearish market sentiment signal a potential short-term pullback, with resistance at $2.66 and support near $2.00.
- A breakout above $3 could invalidate the bearish outlook and pave the way for further gains toward its all-time high.
Ripple (XRP) has had an impressive run recently, but the signs of exhaustion among bulls are becoming evident. After a strong rally of over 13% last week, the cryptocurrency is now facing significant resistance, and analysts suggest that a short-term downturn could be on the horizon.
Profit-Taking and Selling Pressure Weigh on Ripple
Ripple’s price currently trades at $2.47, down from the recent high of $2.66. On-chain data reveals a spike in the Network Realized Profit/Loss (NPL) metric, a clear indication that many XRP holders are cashing in on their gains. Historically, such behavior has led to price corrections, as seen in May 2021 when XRP fell by over 35% after a similar profit-booking spree.
Adding to the bearish sentiment is the long-to-short ratio for XRP, currently at 0.85—the lowest in a month. This metric shows that more traders are betting on a price decline, further increasing the likelihood of a pullback.
Key Resistance Levels and Technical Indicators
The $2.66 price level is acting as a critical resistance point for Ripple. The inability to break above this level could see XRP dropping further, potentially testing the psychologically significant $2.00 mark.
Technical indicators also signal caution. Ripple’s Relative Strength Index (RSI) on the daily chart hovers around 70, which is considered overbought territory. The downward trajectory of the RSI suggests waning bullish momentum and a potential sell signal for investors.
What Could Reverse the Trend?
While the short-term outlook appears bearish, there’s a glimmer of hope for Ripple bulls. A daily close above the $3 mark could invalidate the bearish thesis and reignite momentum. Such a breakout might propel XRP toward retesting its all-time high of $3.40, last seen in January 2018.
However, breaking above $3 would require renewed buying interest and a shift in market sentiment, which seems unlikely in the current scenario of profit-taking and bearish sentiment.
Conclusion
Ripple’s recent rally has been remarkable, but profit-taking and market indicators point toward a potential pullback in the short term. Traders should keep an eye on key levels, particularly the $2.66 resistance and $2.00 support. A break above $3 remains the critical factor that could turn the tide for XRP.
For now, caution is warranted, as Ripple bulls appear to be losing their grip, leaving room for bears to potentially take control.
