XRP Faces Crucial Juncture: Reduced Volatility Triggers Speculation

• Ripple associated XRP token is seeing a unique reduction in volatility, redefining its movement.
• The coin has the potential to print new heights if market conditions and its fundamentals are right.

After several weeks of hitting good numbers, Ripple’s XRP is currently faced with a critical situation. The coin is trading at a decisive point of extensive consolidation amidst a drastic reduction in volatility. Looking at the charts, the XRP token could fluctuate either way, triggering a significant upward or even downward momentum in the near term.

Since August 20th, when the token dropped below the $0.55 threshold, XRP has shown no signs of recovery or significant price gain and this is as a result of the continued drop in volatility. From that time till now, the asset has continued to consolidate between $0.5030 and $0.5398. At the time of this writing, the XRP token was trading at $0.5397, even after gaining 3.67% in the past 24 hours.

This ranging motion has gone on for over one week with the asset failing to breach the $0.54 territory or plunging down to $0.50. In other words, XRP remains below the 50-day EMA of $0.5828 but has managed to reclaim and stay above the 200-day EMA of $0.5171. At the same time, XRP has been consolidating at the 200-day EMA for the past eight days and waiting for market makers to exert their pressures to redefine its course.

XRP, Broad Crypto Market Faces Declining Volatility

Looking at the current trend in XRP, there are speculations that there may be uncertainty amongst market participants and investors which is contributing to the extensive consolidation. It is, however, worth noting that this volatility is not peculiar to XRP as it is instead a market-wide challenge.

Currently, other crypto assets like Bitcoin (BTC) and Ethereum (ETH) have also not breached above or below certain territories, even though the market seems to be generally green. Bitcoin, the leading digital asset has been struggling to stay afloat at $26,000 even in the face of selling pressure amid weakening technical indicators. 

For XRP, this period of declining volatility is a critical juncture that is significant to its position in the next few weeks. The next move of the token will play a part in determining the general direction for the coming days. Such trends usually point to a massive run to either side of the market. 

If participants and investors flood the market with purchases, the resulting situation may be a price jump. However, if their re-entry is characterized by higher sell-offs, the resultant effect would be selling pressure, leading to a more downward trend. Markedly, these mixed signals that XRP is faced with have been happening on different timeframes.

Last month, XRP saw a bullish golden cross on the 4-hours chart and this was the same time when the 50-day EMA crossed above the 200-day EMA on July 13th. Usually, a golden cross is a bullish pattern that suggest a positive momentum. The pattern remained the same and it wasn’t until August 9th when it finally dropped.