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Crypto Market Review, Dec. 5

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Arman Shirinyan

XRP’s reversal may become reality sooner rather than later, but it’s not what you want

Contents

  • XRP’s declining volume profile
  • Potentially premature recovery

The recovery of cryptocurrency markets continues as most digital assets face a recovery after weeks or even months of unstoppable rising selling pressure. However, the overwhelming positivity is a dangerous trend that can do more harm than good to the market.

XRP’s declining volume profile

Trading volume is one of the most accurate indicators that is often overlooked due to its indirect nature and unclear utilization. However, its movement can undoubtedly show investors whether it is a good time to enter the assets, when to expect a reversal and when to test the current trend’s strength.

XRP chart
Source: TradingView

In the case of XRP, the volume indicator is moving downwards, creating a downward trend indicating an upcoming trend reversal which, in this case, would be a downward movement. Unfortunately, another breakout that we labeled invalid in our previous review didn’t bring any fuel back into the market, so it resulted in nothing but a few days of consolidation and a further reversal.

As for now, XRP remains in a complicated position market-wise. Bitcoin’s recovery did not trigger a relief rally for XRP holders, making XRP even more unattractive to the majority of market participants.

The declining volume, invalid reversal pattern and lack of fundamental factors that will push XRP’s value upwards push us to unpleasant conclusions: in these times, XRP cannot yet find buyers who will provide enough buying volume to break the pressure of the market-wide downtrend .

Potentially premature recovery

The dove talk of Fed Chairman Jerome Powell was the catalyst for the current cryptocurrency market rally, but it’s not as obvious as you might think. Indeed, Powell’s speech shows the regulator’s intention to ease the tightening of monetary policy in the US; however, no signals about the pivot were delivered by the Fed.

The desire to pause or calm the rate hike cycle reflects only one thing: traditional and digital asset markets need a break to stay afloat. An outflow of funds from both markets has been decisive since the beginning of 2022.

Obviously, the only thing an investor wants to hear after a full year of pain in the markets is a reversal of monetary policy, the end of the rate hike cycle and the start of the uptrend. The only thing Powell highlighted in his last conference call was a regulator’s desire to ease pressure on the financial market; no signs of forthcoming monetary relief were noted in his speech.

In the past seven days, the cryptocurrency market has gained more than $60 billion to its total capitalization, as assets such as Bitcoin broke through important thresholds and gained up to 20% to their value in a matter of days.

At press time, Bitcoin is trading at $17,257, with XRP changing hands at $0.39 and Ethereum trading at $1,290.

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