XRP Price Tests Key Support Amid Bullish Flag Pattern Formation

XRP price initiated a downside correction after being rejected at the $1.950 resistance zone, mirroring broader market movements seen in Bitcoin (BTC) and Ethereum (ETH). The decline saw the asset drop below the $1.920 and $1.90 support levels, entering a consolidation phase. According to data from the Kraken exchange for the XRP/USD pair, the price has even dipped below the 23.6% Fibonacci retracement level of the recent upward move from a $1.770 swing low to a $1.9578 high. This failure to sustain momentum has placed XRP in a precarious position, trading beneath both the psychological $1.90 level and the 100-hourly Simple Moving Average, a key indicator of short-term trend health.

The current price action is characterized by this consolidation, with the market assessing whether the prior uptrend has exhausted itself or is merely pausing. The rejection at $1.95, a level that could have opened the path toward $2.00, has introduced significant selling pressure. This has shifted the immediate focus from breakout potential to the defense of lower support levels, as the asset struggles to maintain a positive zone.

Amid the correction, a compelling technical narrative is unfolding on the hourly chart. Analysis of the XRP/USD pair reveals a declining channel formation that traders interpret as a potential bullish flag pattern. This pattern, characterized by a sharp upward move (the flagpole) followed by a period of downward-sloping consolidation (the flag), typically suggests a continuation of the prior uptrend if resistance is broken. For XRP, the upper boundary of this pattern, and thus the immediate breakout level, sits at $1.9250.

This creates a clear line in the sand for bulls. A clear move above the $1.9250 channel resistance could invalidate the current bearish pressure and signal the start of another increase. The first major resistance beyond this lies at $1.950. A decisive break above $1.950 could propel the price toward the $2.00 and then $2.05 resistance levels, with the next major hurdle for bulls potentially near $2.120. The formation of this pattern provides a glimmer of bullish hope within an otherwise corrective structure, making the $1.92-$1.95 zone a critical battleground.

Should XRP fail to clear the $1.920 resistance zone, the risk of a fresh decline increases substantially. The technical framework outlines several key support levels that must hold to prevent a deeper correction. Initial support rests near the $1.8650 level, which coincides with the 50% Fibonacci retracement level of the aforementioned upward move from $1.770 to $1.9578. A break below this could see the price test the next major support near $1.8420.

The consequences of a breakdown are clearly mapped. A downside break and a daily close below the $1.8420 level might continue the decline toward $1.8150. The most critical major support sits at the $1.770 zone, the swing low that initiated the last rally. A breach below $1.770 could see the price continue lower toward $1.720. This hierarchy of support levels provides traders with clear markers for managing risk.

Current technical indicators underscore the near-term weakness. The hourly Moving Average Convergence Divergence (MACD) for XRP/USD is gaining pace in the bearish zone, indicating strengthening downward momentum. Furthermore, the hourly Relative Strength Index (RSI) is now below the neutral 50 level, confirming that selling pressure is currently dominant. These indicators align with the price’s position below key moving averages, painting a cautious picture unless the bullish flag pattern is successfully triggered.