XRP has bounced with the rest of cryptocurrency market, but that bounce is exactly what analyst CasiTrades warns traders not to misunderstand. the cryptocurrency just came out a little bounces above $1.35, but technical analysis shows the setup may be more dangerous than it appears.
CasiTrades’ reasoning is that this is not yet a true change in structure, but rather another move within a broader bearish pattern that It has not yet been invalidated.
This bounce could be a trap
According to the shared graph with In the analysis, XRP is shown pushing towards resistance in a full five-wave move. The analyst combined this with a bearish divergence on the RSI, where momentum increased even as the price failed to produce a stronger breakout. As it stands, the RSI is pushing near the upper end of its recent range, supporting the idea of a bearish reversal proposed by CasiTrades.
The analyst’s idea is that the last strength may be greater exhaustion. There have been bullish candles on the hourly frames for the past few days, but according to the analyst, this is exactly where traders get stuck. Despite the green candle, XRP price has yet to reach a new high above $1.4. Instead, the five-wave movement mentioned above is starting to encounter resistance.
A quick bounce can seem like the start of a reversal, especially when the price returns to the same area that recently rejected it. However, without a new high, nothing has changed. This is still just noise within the same larger pattern.
The price levels that matter most
The basis of this analysis is a warning that the price of XRP will still reverse into another prolonged decline that will eventually take it below $1. According to CasiTrades, XRP is still trading between support and resistance, and several degrees are lining up to the downside.
The chart lays out a very specific roadmap of the price levels that matter most on the decline. The first downside target is at $1.13, which CasiTrades treats as the initial leg down. once the current noise disappears. This would mark a return to the lowest price of XRP during the early February crash.
The projection allows for a brief relief bounce after touching $1.13 before another move towards 0.786 macro support around $1.08. The final leg of the bearish sequence is a projected break below $1 and towards the 0.854 support zone, around $0.87. This move would be the end of a larger corrective impulse wave 2.
The bearish argument will not remain valid forever. CasiTrades makes this clear by pointing to the 0.618 zone, as the bullish level needs to recover and become support. That The target is around $1.40.
Featured image from Getty Images, chart from Tradingview.com
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