XRP’s price action took a bearish turn last week, but not everyone is viewing the decline as a negative development. A technical outlook shared by crypto analyst Diana asserts that the current move may represent a decisive moment in XRP’s broader market structure. According to the technical outlook, the ongoing selloff is now in a final shakeout zone, which is creating a deep undervaluation before expansion.
XRP Is In A Shakeout Phase
Technical analysis of XRP’s price action shows that the cryptocurrency is currently behaving exactly as it tends to during periods when market sentiment turns excessively pessimistic. Price is moving lower even as fundamentals continue to strengthen in the background, a divergence that historically preceded deep undervaluation phases.
In terms of a structural perspective, XRP is trading inside a bearish corrective channel. These moves usually end with a liquidity sweep that is designed to force weak holders out of their positions.
According to the analyst, this move looks like the altcoin is in the shakeout phase, where weak hands exit and smart money steps in. As it stands, the weekly RSI is falling toward unseen oversold levels, and there’s a possibility that the XRP price can fall further. Keeping the shakeout thesis in mind, the analyst highlighted the $0.84 as a high-probability demand zone. This demand zone aligns with the 161.8% Fibonacci extension and the weekly 200 moving average.
Below that, XRP bulls must hold above $0.69 in order to preserve the broader bullish structure. A lasting breakdown beneath $0.69 on the weekly timeframe would invalidate the shakeout thesis. The strategy is focused on a reaction around $0.84, followed by a repricing if the structure holds and a final move back to $3.65.
Short-Term Pain To Long-Term Targets
Diana’s outlook also ties into a macro structure she first discussed earlier this month, right when XRP was crashing to $1.15. In that earlier analysis, the analyst described the token as in the process of completing an eight-year cup-and-handle formation that began after the 2017 peak and rounded out through the 2020 to 2021 lows before returning to the $3.60 area in 2025. The current pullback, according to that framework, is playing out the handle portion of the pattern.
The cup and handle is a bullish continuation pattern. The larger structure is expected to maintain its bullish outlook as long as the altcoin holds above the $0.84 to $0.69 support zone. A successful defense of this region keeps the path open for a move back to $3.65, which is the first major repricing level. The longer-term projections based on the cup and handle pattern after $3.65 extend into the $7 range and higher if momentum expands as expected.
from Bitcoinist.com https://ift.tt/jAyqpQB
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