Ripple (XRP) price has been facing significant pressure following a series of bearish technical signals and legal developments. Following the SEC filing an appeal against Ripple, XRP experienced a sharp decline.

Despite this, the RSI has moved out of deeply oversold levels. This indicates that selling pressure may be easing, although the overall trend remains bearish.

XRP’s RSI is currently neutral

XRP’s RSI is currently at 41.60, a significant bounce from its deeply oversold level of 19.79 on October 3. This increase signals that the intense selling pressure seen earlier in the month has eased and some buyers have stepped in.

However, the upward shift in the RSI does not necessarily point to a reversal of the downtrend. It suggests that the asset has exited the extremely oversold territory and is undergoing a possible relief rally.

The Relative Strength Index (RSI) is a momentum oscillator used in technical analysis to measure the speed and magnitude of recent price changes. It ranges from 0 to 100, with key thresholds at 30 and 70. When the RSI falls below 30, it indicates that the asset is oversold and may be poised for a recovery. Conversely, an RSI above 70 means that the asset is overbought.

Read more: Ripple (XRP) Price Prediction 2021/2025

XRP RSI. Source: TradingView

An RSI of 41.60 means that XRP, while still in a downtrend, is seeing some stabilization as the market has cooled down from the extreme sell-off. This level indicates that the bearish momentum is weakening.

However, it appears that buyers have not gained enough strength to completely reverse the trend. In the context of XRP’s ongoing downtrend, an RSI around 40 suggests that while the asset is no longer in oversold territory, it is still under selling pressure.

Traders generally view RSI levels in this range as neutral or slightly bearish, meaning there could still be room for downward movement unless significant buying pressure emerges to push the RSI to 50 or higher. For XRP price to break out of its downtrend, stronger bullish signals and an RSI above 50 would be needed to confirm a potential trend reversal.

Ripple’s DMI shows that the downtrend is strong

XRP’s DMI chart shows that the current market sentiment is dominated by bearish momentum. The blue line, which represents the Positive Directional Index (+DI), is at 11.16. This indicates that buying pressure is quite weak.

On the other hand, the red line, or Negative Directional Index (-DI), is higher at 24.55, suggesting that selling pressure is stronger. This imbalance between buyers and sellers reflects a clear downward trend in XRP’s price action.

The Directional Movement Index (DMI) is a technical indicator used to assess the strength of a trend. It consists of the +DI and -DI, ​​which measure the strength of upward and downward movements respectively, and the Average Directional Index (ADX), which measures the overall strength of the trend, regardless of direction.

DMI do XRP. Fonte: TradingView.

In this case, the ADX, represented by the yellow line, is currently at 38.29. This signals that the downtrend is relatively strong. While the ADX does not specify whether the trend is bullish or bearish, when combined with a higher -DI, ​​it confirms that XRP is in a fairly strong downtrend.

For a possible trend reversal, we would need to see the +DI crossing above the -DI and the ADX continuing to rise, signaling a change in momentum.

XRP Price Prediction: 17% Drop Coming Soon?

On October 2, XRP’s EMA lines formed a death cross, a significant bearish signal that occurs when a short-term EMA crosses below a long-term EMA. This event usually signals a shift in market sentiment, indicating that bearish momentum is taking hold.

Since the death cross, the price of XRP has fallen by 13%. This reinforces the downward trend that has dominated the market after the SEC filed an appeal against Ripple.

The EMA, or Exponential Moving Average, is a key technical indicator used to smooth out price data while giving more weight to recent prices. Compared to the simple moving average, it is more responsive to short-term movements. Traders often rely on the interaction between the short-term and long-term EMA lines to assess market trends and potential reversals.

Read more: 10 DeFi Tokens to Diversify Your Portfolio

XRP EMA and Support and Resistance lines. Source: TradingView.

When a death cross forms, it is often seen as a warning that a prolonged downtrend may be on the horizon. If XRP continues to follow this negative trend, the price could drop even further. It could potentially reach $0.43, which would represent a 17% drop from current levels.

However, if XRP price manages to reverse the bearish momentum, it could retest the resistance at $0.61. If this resistance is broken, it could create room for further upside, pushing XRP price towards the next resistance at $0.66. This would represent a potential upside of 26% from the current price level.

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