XRP is on the radar of many traders after a recent analysis by Tara, a well-known market analyst, using Bitcoin charts as a reference.
At the time of writing, the price of XRP is currently at $1.3661, down 0.09% since it opened early Friday in Asian trading.
According to Tara, the recent rise in XRP prices may be deceiving many investors, as the market is still in a short-term bearish phase.
Tara uses Elliott Wave theory to explain price movements.
According to her analysis, XRP has just completed a five-wave decline that ended at a support level around $1.36, a level that is considered strong and a temporary floor for the market.
From here, XRP is seen to be undergoing a correction in the ABC pattern, consisting of an upward wave A, a slight downward wave B, and a wave C that is expected to bring the price up in the near term.
However, this increase is not a sign that the market is bullish.
Tara points out that the $1.51 level is a key resistance area, aligned with the 0.618 Fibonacci ratio, and many traders risk getting caught in what is known as a bull trap.
This short-term rise may make many think that the market is back on track, but according to the Elliott Wave structure, it is just a preparation for the next wave of decline.
Going further, Tara emphasizes that the third wave expected to occur after this correction may push XRP prices lower, with a target around $1.12, while the macro support level of $0.87 remains a long-term risk level.
With a current price around $1.37, and a failure to break the $1.40 resistance level, XRP is showing weak momentum.
A drop of over 6% last week and over 3% in 24 hours indicates that selling pressure is still strong, due to the lack of a clear catalyst and volatile global markets.
