The XRP price has been holding on pretty tightly to its support level above $2.2 and continues to be a major level of pushback for the bears. This has shown that buyers are beginning to make a comeback at this level amid predictions that it will be the bounce point for the next rally. Regardless of this, a crypto analyst still believes that this support remains at risk as bears continue to push down on the price, and the result could be a major price crash from here.
XRP Price Could Stage A Classic Bear Trap
While there has been some recovery in the crypto market and, by extension, the XRP price, there has not been enough momentum to show that this is a sustained increase. This is something that crypto analyst MyCryptoParadise alludes to in their latest analysis, warning that it is possible that the digital asset might end up seeing a classic bear trap.
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The reason behind this is the fact that there have been a number of bearish developments on the XRP price chart that suggest that the price is likely to go down. For one, a Change of Character toward the more bearish side puts sellers in the lead, and this usually signals the start of a bearish downturn.
Another development that has rocked the altcoin is an inverse Cup and Handle pattern that is still in the process of playing out. The crypto analyst also explained that these developments, in addition to the break below the key support trendline, suggest that a crash is coming for the XRP price.
From here, bears are already applying pressure that could result in a 10% crash. This would push the cryptocurrency back toward the previous support, and according to the analyst’s chart, this lies just above the $2 level. What this means is that a crash from here also puts the altcoin at risk of falling below $2, something that would be incredibly bearish and could lead to freefall.
Wait For Confirmation Before Moving
MyCryptoParadise outlined that the best way to play this analysis is to wait for confirmation. With the bearish thesis, they explain that it is best to wait for the XRP price to see a “proper pullback” before they enter the market. This would increase the risk-to-reward ratio after the trend direction has been confirmed.
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However, there is also the possibility that the XRP price does not crash from here and that lies at the $2.28 level. The analyst explained that if the price is able to cleanly break above this level and make a successful close above $2.28, then it would invalidate the bearish thesis and mark a continuation of the uptrend. “In such a case, it’s better to stay patient and wait for clearer price action before making any decisions,” the analyst said.
Featured image from Dall.E, chart from TradingView.com
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