The recovery of the cryptocurrency markets continues as most digital assets face a recovery after weeks or even months of unstoppable mounting selling pressure. However, the overwhelming positivity is a dangerous trend that could bring more harm than good to the market.
XRP Descending Volume Profile
Trading volume is one of the most accurate indicators that is often overlooked due to its indirect nature and unclear usage. However, its move can certainly show investors if it is a good time to enter assets, when to expect a reversal, and when to test the strength of the current trend.
In the case of XRP, the volume indicator moves down, creating a downtrend that indicates an upcoming change in trend, which in this case would be a move down. Unfortunately, yet another breakout that we called invalid in our previous review did not bring any fuel back to the market, therefore only leading to a few days of consolidation and a further reversal.
For now, XRP remains in a difficult position in terms of the market. Bitcoin's recovery did not trigger a relief rally for XRP holders, making XRP even less attractive to most market participants.
The falling volume, the invalidated reversal pattern, and the lack of fundamental factors that would drive XRP's value higher leads us to unpleasant conclusions: XRP still cannot find buyers in these times that provide enough buying volume to break the trading pressure. the downtrend across the market.
Potentially premature recovery
The dovish talk by Fed Chairman Jerome Powell has been the catalyst for the current rally in the cryptocurrency market, but it is not as obvious as one might think. In fact, Powell's speech shows the regulator's intention to ease the tightening of monetary policy in the US; however, the Fed has not given any signal on the pivot.
The desire to pause or calm the rate hike cycle reflects one thing: traditional and digital resources markets need a break to stay afloat. An outflow of funds from both markets has been crucial since the beginning of 2022.
Obviously, the only thing an investor would like 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 lecture was a regulator's desire to ease pressure on the financial market; In his speech, there were no signs of an upcoming monetary easing.
In the past seven days, the cryptocurrency market has gained over $60 billion in total capitalization, as assets like Bitcoin broke major thresholds, gaining as much as 20% in value in a matter of days.
At press time, Bitcoin is trading at $17,257, with XRP changing hands at $0.39 and Ethereum being traded for $1,290.
