XRP Price Declines to Key Support Level: Should Investors Worry?

XRP is currently trading around $1.90 due to a notable pullback observed over the past month. The pressing question now is whether this decline indicates fundamental weakness or is simply a healthy reset within an overarching upward trend. Crypto analyst Tara provides a technical analysis that emphasizes the importance of the current price level, suggesting it holds more significance than it may initially appear.

Key Takeaways

XRP is currently priced around $1.90, reflecting a notable month-long pullback.
It has tested a significant macro support level around $1.88, which is backed by Fibonacci retracement analysis.
Technical indicators hint at potential upward movement if XRP maintains above this support level.
A failure to hold above $1.90 could trigger a focus on lower price retracement levels.

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XRP Approaches Major Fibonacci Support Zone at Approximately $1.88

In the past 24 hours, XRP's price dipped to an intraday low of $1.88, based on data from CoinGecko. This movement has led XRP to a key macro support zone located around $1.88, identified by a crucial 0.5 Fibonacci retracement on higher-timeframe charts. This level has previously served as a pivot point; notably, it contributed to a bounce on November 21 that drove XRP’s price back to $2.26 within just 48 hours.

The accompanying chart from the analysis below displays several Fibonacci confluences clustered between approximately $1.88 and $1.86, reinforcing the idea that this region is structurally relevant rather than just a random figure. From a price-action standpoint, the current pullback has been relatively orderly, with no significant breakdowns occurring below this support level. As prices consolidate around this area, sellers may be losing momentum.

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Source: Chart from Tara on X

Potential Implications of a Bounce or Breakdown

According to Tara, situations like this often create anxiety among traders because the price is testing support rather than moving away from it. It's during these moments that market sentiment is typically the weakest, resulting in increased fear, even though the risk-reward scenario is improving from a technical standpoint.

Thus, retesting a support level is not necessarily a bearish indicator. Rather, these repeated tests can absorb selling pressure and set the stage for a more robust bounce.

The key takeaway from this analysis is that the reaction at this support level is more critical than the level itself. If XRP can maintain its position above the $1.88 price point without recording a significant new low, this structure would favor a bullish continuation.

In this scenario, upside targets could lie between $2.18 and $2.20. Any bullish momentum could even propel XRP to $2.31, with these being attainable midterm targets, potentially reached before year-end.

Momentum indicators, such as the Relative Strength Index (RSI), are already positioned in oversold territory on the 4-hour candlestick chart, hinting at the possibility of a solid bounce for XRP from the strong support around $1.88. As of this writing, XRP is trading at $1.90, showing initial signs of stability above the $1.88 level.

Conversely, if the price breaks down below $1.90 and drops to $1.80, it would void the current bullish scenario and shift focus to lower retracement levels.

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XRP trading at $1.90 on the 1D chart | Source: XRPUSDT on Tradingview.com