XRP has been on a downward spiral recently, losing 7.9% of its value over just four days. After reaching a high of $2.47 over the weekend, the cryptocurrency has struggled to maintain bullish momentum, with resistance from its simple moving averages continuing to push the price lower. As the digital asset faces mounting pressure, traders are now keeping a close eye on the key support levels that could provide some relief.

With the broader cryptocurrency market also grappling with uncertainty, including concerns around Bitcoin (BTC) and a bearish macroeconomic outlook, many investors are left wondering where XRP will go from here. However, the recent loss doesn’t necessarily spell doom for XRP. A closer look at the market’s behavior and key support levels could reveal an opportunity for a rebound, depending on how market sentiment shifts in the coming days.

Resistance and a Bearish Outlook for XRP

XRP’s recent downtrend began after hitting resistance at the $2.45 mark. This price point coincided with the 50% Fibonacci retracement level from a previous high of $3 earlier this month. At that point, the bulls attempted to push the price higher but were rejected. The inability to break through this resistance is a concerning sign for the cryptocurrency’s short-term prospects.

The 20 and 50-day moving averages also show a bearish trend, with the 20 DMA consistently acting as dynamic resistance in recent days. This suggests that, in the immediate future, XRP may struggle to regain upward momentum unless there is a significant change in the broader market conditions.

Despite these challenges, there are still positive signs within the market structure. The Chaikin Money Flow (CMF) indicator, which measures the buying and selling pressure, remained above +0.05 for most of the last two months, currently sitting at +0.06. This suggests that, despite the recent price dip, there are still significant capital inflows to XRP. In addition, the weak selling volume during the recent downturn could indicate that a shift in market sentiment—such as a Bitcoin recovery—could trigger a rebound for XRP.

Key Support Levels to Watch: $2.20 and $2.37

As XRP’s price continues to struggle, two key support levels are coming into focus. The liquidation heatmap, which shows where liquidations of short and long positions are concentrated, highlights $2.20 and $2.37 as two potential support zones. These levels are expected to attract significant trading interest, with the chance of a bounce at either of these points.

Of the two, $2.20 appears to be the more likely target in the short term, given the recent price action. If the price drops further, this level could act as a crucial support zone that will allow bulls to attempt a reversal. If XRP manages to hold steady at this support level, it could set the stage for a move toward the $2.40-$2.45 resistance range, offering traders a potential opportunity to go long.

What’s Next for XRP?

The next few days are crucial for XRP. With a general bearish market sentiment and negative funding rates in the derivatives market—indicating that short sellers are in control—the outlook for XRP remains uncertain. The cryptocurrency’s performance will likely remain tied to broader market trends, particularly Bitcoin, as its movements often influence the rest of the crypto space.

XRP’s ability to hold the $2.20 support level will be a key factor in determining whether it can recover or continue its downtrend. If the price continues to slide, the next potential support area to watch will be closer to the $2 mark. Conversely, if Bitcoin shows signs of recovery and broader market sentiment improves, XRP could break free from its bearish structure and attempt to test the $2.40-$2.45 resistance level again.

For now, traders should remain cautious and monitor the broader market conditions, as well as XRP’s price action at these critical support levels. A recovery is still possible, but it will depend heavily on how the crypto market evolves in the coming days.

Conclusion

XRP’s recent 7.9% loss in just four days underscores the challenges it faces in the current market environment. With significant resistance at the $2.45 level and uncertainty surrounding the broader crypto market, the next key support levels at $2.20 and $2.37 will be closely watched by traders. Should XRP hold at these levels and broader market conditions improve, there may still be hope for a rebound. However, caution remains advised as the crypto market navigates a period of volatility and uncertainty.