A hot CPI data print has stifled hopes of an immediate recovery for XRP (XRP) as the altcoin continued to trade sideways between $2.50 and $2.30. The crypto asset has dropped below $2.40, and one analyst highlighted that things could get worse for the altcoin if it loses its key level at $2.20.
XRP EMA bands signal a potential bearish reversal
Dom, an XRP markets analyst, highlighted a trend involving exponential moving average (EMA) bands, which have historically triggered a short-term bearish move or potentially a market top in previous bull markets.
As illustrated in the daily chart, whenever XRP’s price has closed a position under the 50-day and 100-day EMA bands, the altcoin has witnessed a minimum 30% correction and a short-term bear market. Between 2017 and 2021, XRP price dropping below the 50-100 day EMA bands has been a strong bear signal. If XRP closes a daily candle below its $2.20 support level, it may drop as low as $1.50 to $1.60 in the coming weeks. However, the analyst added that the altcoin continued to experience continuous spot inflows from Coinbase, Bitstamp, and Bitfinex traders. The downside was that Binance traders had yet to make a significant move since Feb. 7. Dom said, “It’s pretty spectacular how right when Binance spot market starts bidding, $XRP goes up. Binance runs the show when it comes to $XRP price moves.”
XRP liquidity remains above $2.50
XRP has consolidated sideways since Feb. 7, with the overall trend moving toward a bearish directional bias. However, the altcoin remains in no man’s land until the price breaks above $2.50 or below $2.30.
Currently, liquidity remains at both demand and supply areas for XRP, which means these levels will potentially dictate XRP’s movement. With price testing the resistance at $2.50 three times over the past week, the best scenario for XRP will be to take demand zone liquidity under $2.32 before moving toward $2.50. With CPI data coming higher than expected, inflation pressure remains a concern. Thus, the Federal Reserve is unlikely to cut interest rates anytime soon. The highest CPI data since June 2024 will also keep investors in a “risk-off” environment as the collective crypto market struggles to break bearish pressure.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.