Ripple’s native token, XRP, has encountered some challenges recently, facing a more than 3% decline in its value and revisiting levels below the $2.50 mark. The coin dropped to a low of $2.36 within the last 24 hours, triggering some concerns in the market. However, XRP appears to be testing the resilience of the $2.50 and $2.70 price levels—areas that have previously provided strong support. With these critical levels in play, traders are closely watching to see if the token can maintain its stability or continue its downward trend.

XRP’s struggles are not entirely new. Earlier, on February 3, the price dipped as low as $1.95, triggering a wave of concern. However, despite this drop, the cryptocurrency has shown signs of recovery, indicating that there might be a potential for a rebound. While XRP has experienced a more than 22% loss in the past week, recent price movements suggest that it is not completely out of the running for a potential comeback.

Microstructure of XRP’s Price Movement

When analyzing XRP’s price action from a short-term perspective, a possible upward impulsive move is taking shape. While the traditional five-wave pattern used to predict such movements is not clearly visible, this could be attributed to the sharp sell-off followed by a quick recovery in the price. The microstructure still remains uncertain, but what’s critical is the behavior of the asset around the $1.95 and $2.35 support zones.

The price action in this range is key. Should XRP fall below the $1.95 support level, the risk of a further downward movement grows. However, if the coin manages to break through the $2.57 resistance mark, it could pave the way for a positive price shift, potentially aiming for a breakout level around $3.40. But it’s important to remain cautious, as price fluctuations in this volatile market can be swift and unpredictable.

Key Support and Resistance Levels to Watch

XRP’s chart still shows a bullish pattern, as long as it holds above the $1.20 support level. This particular level has recently been tested in the wake of a sharp sell-off across the altcoin market. If XRP can maintain its position above $1.20, it may set the stage for a rally, with potential targets stretching toward the $4.20, $5, and even $6.60 levels. This would mark a substantial recovery from the current price levels.

However, even though the market structure remains bullish at this point, it’s important to note the volatility typical of crypto assets. XRP is currently positioned in a way that suggests it may face continued downside risk or benefit from a possible rally. Market participants should remain vigilant about rapid price movements as it’s not uncommon for third-wave trends in a market cycle to trigger sudden volatility.

Conclusion: The Path Forward for XRP

The next few days could be decisive for XRP, as the price continues to test its critical support and resistance zones. A drop below the $1.95 mark would signal a bearish trend and likely open the door for further declines. On the other hand, if XRP breaks through resistance and surpasses $2.57, it could enter a bullish phase, potentially aiming for higher levels like $3.40.

For those trading XRP, it’s essential to keep an eye on the price action, especially in light of the coin’s volatile nature and the broader market sentiment. As always, caution is necessary, and traders should monitor key support and resistance levels closely to gauge the future direction of XRP’s price.

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