The token, which had seen modest movement earlier in the week, now shows signs of reduced volatility and weakening demand, raising concerns about a potential bearish shift.
XRP Trading Flatlines, But Sellers Could Soon Take Control
Readings from the XRP/USD one-chart show that the altcoin has trended within a narrow range over the past three trading sessions. Since Friday, XRP has faced resistance at $3.30 and found support at $3.22.
This follows a four-day rally between August 3 and 7, during which the token surged by 20%. The current sideways trend indicates reduced market volatility, reflecting a relative balance between buying and selling pressure.
In such phases, the market is often in a “wait-and-see” mode, with traders anticipating a catalyst to determine the next price move.
The decline in volatility is evident in XRP’s Average True Range (ATR), which has dropped by 10% since August 7. The ATR measures the degree of price fluctuation over a set period, and a falling ATR signals calmer market conditions with less volatility.
While periods of low volatility suggest market stability, it can also mean traders are becoming less active, often a precursor to a sharp breakout in either direction.
Furthermore, XRP’s Elder-Ray Index strengthens the case for a potential bearish breakout. This indicator measures the strength of buyers (bull power) and sellers (bear power) by comparing price movements against a moving average.
On XRP’s daily chart, the Elder-Ray Index has been posting green histogram bars, representing bullish strength, that have steadily diminished in size over the past few days.
This contraction points to a loss of buying momentum and creates an opening for sellers to assert control and drive XRP’s price lower.
XRP Faces Make-or-Break Moment Between $3.22 and $3.66
Strong sell-side pressure could trigger a break below support at $3.22. If this happens, XRP’s price could deepen its decline and fall to $2.99.
However, XRP could push above the price wall at $3.33 if new demand resurfaces. A successful breakout could open the door for a rally toward $3.66.
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