Key takeaways
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XRP price must reclaim $3 support to avoid a deeper correction to $2.24.
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Spot taker CVD remains negative, suggesting waning demand.
XRP (XRP) showed weakness on Monday, down 5% over the last 24 hours, and traded at $2.97. Multiple technical and onchain indicators suggest that the second-biggest altcoin must reclaim $3 support to avoid a deeper correction toward $2.24.
XRP Price Bulls Must Hold $3
The latest sell-off has seen XRP price drop below the psychological $3 level. The last time XRP saw a high volume close below it was in January, preceding a 50% drop to $1.61 in April.
A daily close below $3 could trigger a similar drawdown in price, with the first area of interest between the 50-day simple moving average at $2.94 and the local low at $2.72 (reached on Aug. 2).
The second area of interest sits between the 100-day SMA at $2.60 and the 200-day SMA at $2.45. Losing this support would bring $2.24 into the picture, where the July rally started.
Data from Cointelegraph Markets Pro and TradingView shows XRP trading breaking below a symmetrical triangle on the daily candle chart, as shown below.
Failure to close above the triangle’s support line at $3.00 puts the price at risk of falling further to as low as $2.25, or down 25% from the current level.
The relative strength index is headed downward, dropping to 45 from 61 over the last week, suggesting that the bulls have lost momentum.
XRP Spot Taker CVD Signals High Seller Volumes
Analyzing the 90-day spot taker cumulative volume delta (CVD) reveals that sell-orders (taker sell) have become dominant again. CVD measures the difference between buy and sell volume over a three-month period.
Since July 28, sell-side pressure dominated the order book, after the XRP/USD pair hit multi-year highs above $3.66 on July 18.
Negative CVD (red bars in the chart below) indicates profit-taking among traders, which signals waning demand as sellers take control.
If the CVD remains red, it means sellers are not backing down, which could set the stage for another leg down, as seen in historical corrections.
As Cointelegraph reported, 94% of the XRP supply is in profit at current prices, a level that has historically aligned with price tops.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
For further details, you can visit the original article on Cointelegraph: here.
