XRP is trading around $1.99, approximately 1% lower in the last 24 hours. Despite the volatility of the broader market, XRP has only dropped about 4% this week, which means it is more stable than many altcoins like ADA and BCH.
More importantly, the chart shows an early bullish reversal signal. The setup has not yet been confirmed, but if one key level holds, the chance of a short-term recovery of at least 9% becomes significantly greater.
Bullish divergence visible while XRP price defends crucial support
XRP has formed a bullish divergence on the daily chart between December 1 and December 14. A bullish divergence occurs when the price makes a lower low, but the Relative Strength Index (RSI) makes a higher low. RSI is a momentum indicator that shows how strong buyers and sellers are. If the RSI improves while the price weakens, it is often a sign that selling pressure is decreasing.
On the daily chart, such a standard bullish divergence can lead to a trend reversal from bearish to bullish.
However, this divergence alone is not enough. It only counts if the XRP price holds support.
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This support lies around $1.97. XRP has defended this area multiple times, and on-chain data shows why.
The cost basis heatmap shows a strong concentration of XRP that has been bought between approximately $1.97 and $1.98.
Approximately 1.79 billion XRP have been bought in this range. A cost basis heatmap shows where large groups of holders purchased their coins. If the price moves around these levels, holders will be less likely to sell at a loss. This strengthens the support.
As long as XRP remains above $1.97, the bullish divergence remains valid, as long as the RSI also stays strong.
Why $2.17 is the first real test for the bulls
If the support holds, XRP may rise further. The first target on the upside is around $2.17, about 9% higher than the current level.
This level is important because the cost basis heatmap shows a lot of supply between $2.16 and $2.17. Approximately 1.36 billion XRP has been purchased in this zone. This creates a strong resistance where selling pressure may arise.
If the XRP price breaks through $2.17 with a daily candle close, the path may open to $2.28, then $2.69, and possibly $3.10. These levels are currently less important and depend on the overall market conditions.
The boundary at which the reversal signal becomes invalid is clear. A daily candle close below $1.97 weakens the reversal signal and makes a further decline to $1.81 and $1.77 possible.
At this moment, the XRP price is at a decision point. The bullish reversal signal is there, but only if the key support level holds.
