XRP Chart Flashes 2022-Style Bottom Signal as Trend Weakness Deepens

XRP's price action is sending a familiar—and potentially ominous—signal. The chart is printing a technical pattern that last appeared in 2022, right before a significant low was established. This isn't just a minor blip; it's a classic bottoming signal emerging amid clear trend weakness.

The Ghost of Bottoms Past

For chart watchers, the parallels are hard to ignore. The same convergence of oversold momentum and key support levels that marked the 2022 capitulation is reappearing. It suggests the current sell-off may be exhausting itself, setting the stage for a potential reversal. Think of it as the market's version of a distress flare.

Weakness Before the Turn

Critically, this signal isn't appearing in a vacuum. It's forming against a backdrop of persistent downtrend pressure—the kind that shakes out weak hands and tests the conviction of long-term holders. This combination—extreme weakness followed by a recognized reversal pattern—is what gives the signal its weight.

A Provocative Close

While the signal hints at a floor, it doesn't guarantee an immediate rocket ride back to previous highs. In the cynical world of crypto finance, a 'bottom' often just means the price stops falling long enough for a new narrative to be built. But for XRP, a confirmed reversal here could mark a pivotal moment, separating the panic sellers from those who see value in the chaos.

EMA Ribbon Signals Have Led to Major Drawdowns

Although the long-term momentum appears to be exhausted, the medium-term momentum appears to be more cautious. On the 3-day chart, Steph identifies the EMA ribbon pattern that keeps repeating.

When this pattern turned bearish, and XRP traded below it in the past, there was a substantial fall that followed. These falls weren’t just temporary. They went on for several months and fell between 27% and 66%.

What’s worth noting in this pattern is its consistency. As of now, there are still no visible exceptions in this pattern. If the prices go below the upper Moving averages, XRP tends to go to a grinding downtrend rather than plummeting. There are weak reversals in this pattern, but they all fail as the decreasing averages limit the prices until the momentum runs out.

XRP Rallies Sharply Above Averages

In the most recent cycle, XRP had another sharp rally and went high above its averages. The sharp increase is settling back a bit now. The price is clinging to the top edge of the EMA Ribbon and showing initial indications of flattening out. Up until now, the decline to around 6 to 7% is quite tame by correction standards.

However, history reveals that such weakness in the early stages around peak cycles can cause a larger pullback if the momentum just keeps weakening. The moving averages remain high, which means it hasn’t yet come back to its average.