XRP Price Seeks Higher Support After Sending Mixed Signals on Wednesday

XRP price has defended its lifeline support at $0.52 after its reversal from a $0.43 low reached on Monday was rejected under $0.52.

XRP price showed mixed signs on Wednesday, trading sideways following a slight recovery from its Monday lows. As bulls and sellers struggle for direction, higher key support is expected to be critical in the coming few days.

XRP Price Seeking Higher Support

XRP price defended its lifeline support at $0.52 after its recovery from a $0.43 low reached on Monday was capped below $0.52. It seems the bulls lost momentum due to the general market uncertainty about high interest rates in the US, which continues to impact trader conviction.

The Relative Strength Index (RSI) recovery from the oversold territory into the neutral zone supported the initial bounce back in Ripple price. However, failure to sustain movement above 50 saw some traders pulling out, possibly to wait for another confirmation of the uptrend.

Short-term support at $0.5 is critical and must be defended at all costs if bulls want XRP to push above $0.6 resistance. However, such a bullish outcome is not guaranteed, considering two recently validated death cross patterns.

A death cross occurs when a short-term moving average, like the 50-day EMA in Ripple’s case, crosses below a long-term one like the 200-day EMA, signaling prospective bearish price action.

The first death cross occurred after the 20-day EMA in blue crossed below the 50-day EMA. These patterns often precede downward price trends, which means that XRP price could slide below $0.5, increasing downside risk to $0.46. Furthermore, Ripple’s position below the three EMAs further disadvantages the bulls, bringing solid challenges to the uptrend.

Based on insights from the derivatives market on Coinglass, Ripple still needs another push to fully dissociate from potential bearish entanglements. After the open interest exploded, reaching $884 million on August 1, the trend has been down to only $476 million recorded on August 7.

It is worth noting that decreasing open interest suggests declining market activity and potential XRP price weakness. It depicts fewer traders holding positions, which may escalate the risk of a correction.

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