XRP And Dogecoin See Brutal Corrections

After a meteoric rise, XRP and Dogecoin have experienced a significant correction, leaving new investors facing renewed uncertainty. This sudden reversal underscores the precarious nature of unestablished gains and raises questions about the strength of the recent rebound.

In Brief

• XRP and Dogecoin sharply reversed their weekly gains, experiencing declines of 12% and 18%, respectively.
• Technical analysis suggests a weakening upward trend for XRP, although the overall structure remains intact.
• Dogecoin's indicators provide no clear direction, although some bullish signals persist.
• Despite the volatility, broader macroeconomic factors, including a new trade agreement between the United States and the EU, offer underlying support to the market.

A Technical Halt: XRP and Dogecoin Erase Their Gains

Investors anticipating a swift continuation of the upward trend following the rebound were quickly met with disappointment. XRP shed 12% of its value over the past week, while Dogecoin plummeted 18%, making it the worst performer among the top 10 cryptocurrencies.

These declines follow a period of impressive gains, proving particularly disheartening for traders who entered the market later in the rally. The crypto market is currently pausing to consolidate after a volatile week, purging overextended positions. In this environment, both XRP and DOGE exemplify the stark reality of a reversion to the mean in such a dynamic and unpredictable market.

Technical indicators support this pullback while providing valuable insights into potential future movements. Here are the key signals observed for both assets:

• XRP: ADX at 21 indicates a weakening uptrend (below the critical threshold of 25). RSI at 64 suggests positive momentum, but not an overbought condition. The 50 and 200-week EMA moving averages point to a bullish structure, with the price above both. The Squeeze Momentum Indicator is off, indicating the squeeze has ended and volatility is returning.
• Dogecoin: ADX at 17 signals the absence of a dominant trend, typical of a consolidating market. Its RSI at 54 reflects a neutral condition without excessive buying or selling pressure. The 50 and 200-week EMA moving averages are converging. The Squeeze Momentum Indicator is on, signaling an upcoming move.

These elements point to a consolidation phase following an overly rapid ascent. While XRP's bullish structure remains intact despite the pullback, Dogecoin's signals are more neutral. However, the formation of a double bottom on the weekly chart is viewed as a potentially bullish sign if support levels hold.

Market Consolidation and Favorable Signals

Beyond the specific technical indicators of XRP and Dogecoin, their pullbacks align with a broader market trend. Bitcoin, for instance, has fallen below $118,000, down from a peak of $123,000 reached on July 14. Ethereum is trading around $3,800, remaining relatively stable.

This consolidation phase has been marked by over $539 million in liquidations, a direct consequence of excessive leverage in many positions. This widespread pullback is not exclusive to XRP or DOGE but reflects a general market dynamic.

Despite this, some signals offer continued optimism. The recently announced trade agreement between the United States and the European Union, establishing a single 15% tariff, has instilled confidence in the markets.

This agreement reduces uncertainty surrounding risk assets, and the return of some geopolitical stability favors cryptocurrencies. On Myriad, the predictive platform of the Dastan group, 68% of traders believe that Ethereum will reach a new ATH by the end of the year. Finally, the presence of a double bottom on the weekly charts of XRP and Dogecoin, often interpreted as a bullish signal, suggests that key technical support levels are being maintained.

These factors suggest that the current correction could evolve into a preparation phase for a new bullish cycle. The market appears to have maintained its fundamental structures, and support levels are largely holding.