XRP price recovery hits resistance, raising bull trap concerns XRP price rally faces crucial resistance

 Ripple has experienced a significant recovery over the past week, surging more than 30% from its lowest point this month. 

Ripple XRP xrp 0.11%

On Sunday, April 14, the price of XRP reached a peak of $2.25, driven by renewed interest from buyers following a sharp decline earlier in the month. 

This resurgence can be attributed to increasing optimism that former President Donald Trump may relax tariffs. Last week, he suspended several reciprocal tariffs on imports from more than 70 countries, and over the weekend, he announced that smartphones would be exempt from any tariff hikes. 

Additionally, the market responded positively to the recent joint filing by the SEC and Ripple Labs, which sought to suspend appeals and pursue a negotiated settlement. This development followed the SEC's decision to conclude its lawsuit against Ripple. 

Moreover, XRP's price saw a slight increase after Ripple's acquisition of Hidden Road for $1.25 billion. A Ripple executive indicated that the company aims to transfer Hidden Road’s $10 billion in daily trading volume to the XRP Ledger.

XRP is currently undergoing a significant technical evaluation following its recent rally, as it encounters resistance at the 50-day Exponential Moving Average.

Historically, XRP has had difficulty surpassing this threshold. Compounding the situation is the emergence of a small evening star candlestick, which serves as a bearish reversal indicator, marked by a diminutive bearish body and slender upper and lower shadows.

Importantly, the upper shadow coincides with a descending trendline that connects the highest swing points since January 16. It also intersects with the upper limit of the red descending channel depicted on the chart, signaling another technical caution that a potential decline towards the lower boundary of the channel may ensue.

Additionally, as previously reported by crypto.news, XRP has been developing a head and shoulders pattern, with its neckline positioned at $1.955. The head and shoulders pattern is recognized as one of the most bearish formations in technical analysis.

Consequently, any further upward movement will only be validated if XRP decisively breaks above both the 50-day EMA and the upper boundary of the descending channel. A complete bullish breakout would necessitate a rise above the right shoulder of the head and shoulders pattern, which is currently at $3.40.

Conversely, a decline below the $1.955 neckline and this month’s low would confirm the bearish head and shoulders formation and likely lead to additional downward movement.