XRP Fights to Break Key Barrier Amid Bitcoin Boost

XRP Fights to Break Key Barrier Amid Bitcoin Boost

By Jakub Lazurek

08 Nov 2024 (3 hours ago)

2 min read

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XRP struggles to break a key resistance level despite Bitcoin's rally, with mixed signals hinting at caution for investors awaiting a breakout.

XRP is facing challenges trying to break above a key resistance level despite Bitcoin’s positive influence on the crypto market. XRP has struggled to sustain a clear upward trend, repeatedly failing to close above a significant price barrier over the past six weeks. Although occasional rallies have occurred, they haven’t provided the necessary momentum to push beyond this level, signaling a lack of strength in XRP's current upward movement.

A recent divergence in Daily Active Addresses (DAA) has issued a sell signal, signaling potential caution for XRP investors. This signal usually emerges when active participation, indicated by the number of active addresses, starts to dip even as prices increase. This divergence can suggest a weakening demand if fewer traders are involved with the asset, even amid price gains. Should XRP holders respond to this signal and sell off, it could add pressure to the price, interrupting the recent upward trend and stalling any chance of a breakout.

The correlation between XRP and Bitcoin (BTC) is providing short-term support for XRP’s price, as Bitcoin’s recent highs have spurred interest across the crypto market. This growing correlation has helped XRP benefit from Bitcoin’s momentum, although it also makes XRP vulnerable to fluctuations in Bitcoin's performance. If Bitcoin’s rally pauses, XRP’s gains could also falter, underscoring XRP’s dependence on Bitcoin-driven momentum.

Currently, XRP is trading close to an essential Fibonacci retracement level, which serves as a critical resistance point. Breaking this line could be a turning point for XRP, potentially drawing new buyers and setting a monthly high. However, mixed market signals and conflicting technical indicators suggest that this breakthrough may not come easily. Should XRP be unable to surpass this level, it may settle into a consolidation phase, stabilizing slightly above a lower price range. This would indicate a period of sideways movement, as investors wait for clearer signals.

A successful move past this resistance could pave the way for further gains. If XRP can reach the next significant level on the Fibonacci retracement, it would signal a strong bullish trend, overcoming bearish sentiment and confirming a potential for continued upward momentum. This breakthrough would likely encourage greater investor confidence and attract more interest in XRP’s long-term prospects.

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