A significant technical event for XRP has occurred during the volatile cryptocurrency market: the creation of its second death cross in 2024.
Analysts and traders are keeping an eye on this development as they consider the possible ramifications of this formation.
A death cross, which is usually seen as a negative signal, happens when a short-term moving average, like the 50-day moving average, crosses below a long-term moving average, such the 200-day moving average. This is the second time that XRP has experienced this this year; the first occurred in late January.
In contrast to other markets where death crosses frequently portend a possible sell-off, in the case of XRP they appear to invariably indicate significant or interim bottoms.
After 2024’s first death cross, XRP went through a bottoming period. Three months later, the price enjoyed a resurgence that saw it hit highs of $0.748. This might be the case because, by the time the death cross appeared, the price had already been oversold.
Those investors who are wondering if a similar pattern would emerge following this second death cross can find some optimism in this historical story.
Ahead of the Federal Reserve meeting, which is set to start on Tuesday and finish on Wednesday with a fresh interest rate decision and press conference, the price of XRP had dropped 2.49% in the previous day to $0.494 at the time of writing. This was due to selling pressure on the larger cryptocurrency market.
Due to concerns over the timing and potential number of rate reduction this year, investors are anticipating advice on the outlook for interest rates.
The market had anticipated that rates would be lowered as early as June, but new economic statistics have shown that inflation is ongoing and the economy is still strong, delaying this timeline until September.
The current state of the market raises further questions regarding the potential consequences of a death cross formation for XRP. If losses continue, $0.467 is expected to be XRP’s next significant support level. This level has served as a foundation for the cryptocurrency’s two April price increases. However, a break above the 50 and 200 day moving averages might be the first indication that the price of XRP is starting to strengthen.
