XRP is trading near $1.99, losing about 1% over the last 24 hours. Despite the overall market volatility, the asset has decreased only 4% over the week. This indicates relative stability compared to many other altcoins, such as ADA and BCH.
Moreover, the chart gives an early signal of a possible trend change. The pattern has not yet been definitively confirmed. However, if the key level continues to hold, the likelihood of a short-term bounce of at least 9% will significantly increase.
Formation of bullish divergence and protection of positions
On the daily chart of XRP, a bullish divergence formed from December 1 to 14. This technical phenomenon is observed when the price of the asset updates local minima while the Relative Strength Index (RSI) shows rising minima.
RSI serves as a momentum indicator that measures the strength of buyers and sellers. Improvement in the indicator's readings against the backdrop of declining quotes often signals that selling pressure is exhausting. On the daily timeframe, standard divergence of this type can lead to a trend reversal from bearish to bullish.
However, mere divergence is not enough. The critical value is the ability of the price to hold the support zone.
The mentioned support is near $1.97. The cryptocurrency has repeatedly defended this zone, which is confirmed by on-chain analytics data. The heat map of the base value shows a dense cluster of coins purchased exactly in this range.
Investors accumulated about 1.79 billion XRP in the corridor of $1.97–1.98. The heat map shows levels where large groups of holders entered positions. When the price is trading near the entry point, market participants are less inclined to lock in losses. This circumstance strengthens support.
As long as prices remain above $1.97, the bullish reversal theory remains relevant provided there are strong RSI indicators.
Testing resistance at the level of $2.17
If the current positions are successfully held, the asset has room to move upwards. The first target is around $2.17, which represents approximately a 9% increase from current values.
This level is important due to the concentration of supply. The heat map indicates the presence of a significant volume of coins in the range of $2.16–2.17. About 1.36 billion XRP was acquired here. Therefore, a resistance area is forming in this zone, where selling pressure is likely to emerge.
If the price surpasses the mark of $2.17 with a daily candle closing, it could open the path to $2.28, then to $2.69 and eventually to $3.10. However, these targets remain secondary and depend on the broader market conditions.
The scenario for canceling the forecast is also evident. A daily close below $1.97 will weaken the reversal formation. This creates a risk of further decline to levels of $1.81 and $1.77.
At the moment, the asset is at a decision-making point. The signal for growth is active, but its implementation fully depends on the stability of key support.
