XRP's Bullish Momentum at Risk: Bearish Divergence Signals Potential 23% Correction

XRP's recent price action has raised concerns among traders and analysts, with bearish divergence signals suggesting a potential correction. After hitting a multimonth low, XRP's volatility has put its bullish momentum at risk, complicating its outlook amid fluctuating market conditions.

A COINOTAG analysis highlights that XRP's relative strength index (RSI) is signaling weakening buying pressure, suggesting further downside risk. XRP's price may face a 23% correction amid bearish signals on key charts, demanding attention from crypto traders and investors.

XRP's impressive surge over the past three months has captivated the crypto market, soaring from $0.50 to an all-time high of $3.40—a staggering 580% increase. However, the altcoin's recent price action reveals concerning technical signals, particularly a bearish divergence developing on both the daily and weekly charts.

The fluctuations in liquidity have been exacerbated by external factors, including a recent flash crash tied to a non-crypto political event. This scenario suggests that buying interest might be waning, culminating in an erosion of bullish momentum for XRP.

As depicted in the charts, XRP has managed to establish higher highs in price, yet its relative strength index (RSI) has charted lower highs—a classic indication of diminishing buyer strength. Both the daily and weekly RSI trends are falling from overbought conditions, hinting at a potential market reversal.

Should these bearish divergences materialize, XRP faces the risk of retreating below the critical threshold of $2, implying a drop of approximately 23% from its current value, as new support levels develop at lower price points.

It is essential to contextualize XRP's current market position. Despite its prior highs, the altcoin has been met with increased volatility, often characteristic of the broader cryptocurrency landscape. According to recent data, XRP's price retracement could be indicative of larger market trends, where fear of further corrections is palpable among traders.

The analysis from COINOTAG underscores that high-timeframe charts tend to dictate more significant market trends, and the divergence observed on both the daily and weekly frames could signal a shift towards a bear-favored environment. Such changes warrant careful monitoring, especially given the crypto market's propensity for rapid fluctuations that can impact long-term positions