XRP continues to attract the attention of the market as technical levels suggest the cryptocurrency is at a critical phase in its weekly chart. Analysts say the cryptocurrency is reaching a crossroads as the price action is compressing near a long-term support level.

As of press time, the XRP price is trading at $1.41, showing a rise of 1.65% in the last 24 hours. According to CoinMarketCap, the trading volume has decreased by 6.05% to $1.46 billion over the last 24 hours. Over the last seven days, the XRP price has shown a rise of 5.22%.

Source: CoinMarketCap

XRP Triangle Forms Near 200 EMA

Crypto analyst Egrag Crypto explained the weekly chart of XRP. The analysis focused on the 200-week exponential moving average. This indicator has historically acted as a major momentum pivot for XRP.

According to the analyst, XRP price action recently declined towards the 200 EMA before rejecting it. However, after rejecting the 200 EMA, price action started to form a triangle structure. This indicates that the market is entering a compression phase.

The triangle indicates a reduction in price volatility after a significant price surge. This type of triangle is usually seen when the selling pressure is losing steam. At the same time, buyers are gradually absorbing the available sell orders in the market.

According to analysts, triangle patterns usually break before reaching their apex. This is usually considered a decision point for traders. The next price action will determine the direction of the short-term price trend.

The first possible scenario is a liquidity move below the triangle structure. In this case, XRP will fall before it turns around. The price targets will be between $0.93 and $0.80.

Also Read: XRP Holds $1.40 While Multi-Year Triangle Breakout Points to $50 Potential

Two Possible XRP Scenarios Emerge

The analyst indicates that the levels correlate with historical retracement zones. There may also be liquidity present beneath the triangle formation. This scenario has an estimated probability of 40%.

Another scenario involves the continuation of the compression pattern within the triangle. The token may continue to hold near the bottom of the triangle while respecting the 200 EMA. Volatility may continue to decrease before a potential breakout.

If the breakout is to the upside, there are two potential levels identified by the analyst. These levels are $2.20 and $3.20. The probability of the scenario is estimated to be 60%.

Source: X

Triangles that follow a strong impulse tend to move in the direction of the trend. In the case of XRP, the trend is associated with the 200 EMA. As long as XRP holds above the 200 EMA, the macro trend remains intact.

Derivatives Data Shows Growing Activity

Derivatives market data also shows rising activity. CoinGlass data shows that the trading volume has risen by 5.44% to $2.37 billion. Open interest also registered a 1.73% increase and reached $2.59 billion.

The current OI-weighted rate is 0.0046%. This figure represents the balance between long and short positions in the futures markets. The data suggests continued participation from derivatives traders.

Source: CoinGlass

This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.

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