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XRP is currently facing a critical juncture. The question is whether XRP can sustain the $0.5 level or whether the recent break below multiple moving averages signals a more significant pullback.
At first glance, the XRP chart presents a troubling situation for bulls. The asset has recently languished below several major moving averages that traditionally serve as support layers. The 50-day, 100-day, and 200-day moving averages have now turned into resistance levels that must be overcome for XRP to regain bullish momentum. These moving averages, especially the 200-day, are closely monitored by traders and can often determine the direction of the trend in the medium to long term.
Current resistance levels are set near $0.5587 and $0.5850, representing the proximity of recent local highs and the 50-day moving average. A successful breakout and close above these points could indicate a possible reversal of the recent downtrend. Conversely, the support levels to watch are $0.4700 and $0.4500, where buyers have shown interest so far.
If XRP is able to consolidate and push back above the $0.5 threshold, it will need to sustain the upward movement and close above the aforementioned moving average. This could instill confidence among traders and trigger a rally towards higher resistance levels.
dangerous growth
The US dollar index serves as a barometer of the dollar's strength against a basket of foreign currencies and is often inversely correlated with the cryptocurrency market. Recently, technical analysts have noted the formation of a “golden cross” on the DXY chart, a bullish signal where the 50-day moving average crosses above the 200-day moving average. If this pattern materializes, it could cause problems for the crypto market, which has traditionally been sensitive to dollar strength.
The DXY chart currently shows the index hovering around the 103.87 mark, with the 50-day moving average moving towards the 200-day moving average. The formation of a golden cross usually indicates that a long-term uptrend in the dollar is at hand and suggests buying momentum is building.
The connection between DXY and cryptocurrencies is clear. A strong dollar often leads to a decline in the price of digital assets such as Bitcoin and Ethereum. Investors typically flock to the safety of the dollar in uncertain economic times, which can result in a decline in risk-on assets such as cryptocurrencies. If the DXY golden cross actually materializes and causes the dollar to rise, the crypto market could suffer a corresponding slump as capital flows out of digital assets and into the traditional haven of fiat currencies.
Cardano is no longer bullish
Cardano has recently shown signs of a trend reversal and has come out of bullish mode. This change in momentum has sparked a debate among investors and traders to re-evaluate the short-term outlook for the asset.
After a period of sustained uptrend, ADA breaks below the ascending channel, a structure that typically indicates bullish sentiment. This downward breakout signals a possible shift to bearish momentum, or at least a pause in the uptrend. The price is currently hovering around $0.575, just below the lower bound of the yuan channel, indicating the possibility of new resistance.
Looking at the support levels, the near-term support level is $0.5385, which is important for ADA to hold to prevent further decline. A break below this support could lead to a test of the next support level near $0.5112, and the 50-day moving average could provide some buoyancy to the price.
Cardano’s current trajectory indicates a cooling period after breaking out of a bullish channel. The volume profile has shown a decline during this downturn, which may indicate a lack of conviction on the part of sellers. However, for ADA to regain its bullish stance, it will need to re-enter the channel, challenge the recent highs around $0.68, and sustain the push above $0.60.
About the author
Armand Sirignan
