Why Can’t XRP Break Through? The $2.40 Barrier Is Just Too Strong!

XRP/USD Analysis – Uptrend Pauses, Signs of Weakness Below $2.40?

Overview (May 20, 2025)

XRP/USD is currently trading around $2.3677, showing a pause after a sharp rebound from $2.28 to $2.40 the previous day. From a technical perspective, the $2.40 level is acting as strong short-term resistance, with several indicators suggesting that the rebound is losing momentum. In particular, the failure to break above the 200-hour moving average is evidence that a medium- to long-term trend reversal has not yet been confirmed.

The behavior of ADX and DMI, along with a declining volume trend, indicates market indecision about the “next direction.” From here, a cautious trading strategy with adjustment potential in mind is advised.

Key Point 1: Price Capped by Moving Averages, Selling Pressure Reemerging

On the chart, XRP/USD temporarily broke above the 50-hour moving average (blue line) but was capped at the $2.40 level and failed to break the 200-hour moving average (red line). Multiple bearish candlesticks with upper wicks suggest selling pressure is reacting in this price zone.

The current pattern is one that "invites selling on rallies," forming a box-range scenario where the 200MA acts as resistance and the 50MA acts as support. Until this range is clearly broken, the short-term trend is likely to remain sideways to slightly bearish.

Key Point 2: Narrowing ADX-DMI Gap Indicates Slowing Buying Momentum

Looking at the lower technical indicators, the ADX (yellow line) had been rising during the recent rebound but is now flattening or slightly declining, indicating "trend convergence" or "energy depletion."

In the DMI, although +DI (green line) remains above -DI (red line), the gap is narrowing, clearly indicating weakening buying momentum. This is a sign that the trend may be nearing its limit. If ADX continues to fall, the possibility of a correction increases.

Key Point 3: Peaking Volume Reflects Cautious Market Sentiment

During the initial rebound ($2.28–$2.34), a sharp increase in volume was seen. However, since reaching $2.36, volume has shown a declining trend. This indicates a lack of new buying interest and growing skepticism about the rally.

Additionally, the shortening of bullish candlesticks and reduced volatility are also noteworthy. These are signs that market participants are entering a "wait-and-see" mode, suggesting that new catalysts (e.g., economic data or breakouts) are needed to drive further movement.

※Image source: cTrader platform

Outlook and Trade Strategy

XRP/USD is likely to explore short-term direction based on the following technical factors:

• Breakout above $2.40 resistance zone: A successful breakout may lead to the $2.44 range.
• Whether ADX falls below 0.20: A drop below this level would signal trend exhaustion and a shift to range-bound trading.
• Rejection at the 200MA: As seen previously, this may trigger renewed downside risk.

Example Trade Scenarios

Bearish Scenario (Targeting Pullback)
Entry: Short if price breaks below $2.36
Target: $2.32–$2.30 (nearby support)
Stop Loss: Exit if price exceeds $2.41

Bullish Scenario (Breakout Play)
Entry: Long after a confirmed breakout above $2.41
Target: $2.44–$2.46 (prior high zone)
Stop Loss: Exit if price drops below $2.37

Conclusion:

XRP/USD’s rebound from $2.28 appears to be losing steam near the $2.40 level. Resistance from moving averages, stagnant ADX, narrowing DMI, and declining volume are all converging, putting the pair at a potential inflection point — will the rebound continue or will a correction begin?

For short-term traders, rather than entering aggressively at current levels, it may be more effective to adopt a **trend-following strategy after a confirmed breakout**, or a **short strategy if a correction begins**. Until clear direction emerges, cautious positioning with controlled risk is recommended.

Disclaimer:

This article is intended for informational purposes only and does not constitute a recommendation to buy or sell any financial instrument. All trading decisions are your sole responsibility.
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