XRP under pressure: the weekly hammer candle and oversold signals offer hope for a rebound

After the Federal Open Market Committee (FOMC) implemented its third consecutive rate cut on December 10, lowering the US federal funds rate by 25 basis points to the range of 3.50% to 3.75%, the cryptocurrency markets are facing a period of reevaluation. XRP has experienced significant volatility as a result, but now technical signs are emerging that suggest a potential trend reversal.

The Inverted Hammer Formation: Signal of an Uptrend Reversal?

The most prominent technical pattern comes from the weekly candle that closed near $1.94. According to crypto analyst Egrag Crypto, this candle formed an inverted hammer, one of the most reliable bullish reversal patterns when it appears after a clear downtrend. This pattern suggests that sellers are losing control after pushing prices lower.

Egrag outlined a scenario with three possible outcomes and their respective probabilities. There is a 40% chance that the market bottom has already formed at these levels. An additional 35% indicates a slight corrective dip before the final bottom is established. The remaining 25% presents the risk that the pattern fails and the downtrend continues. However, the analyst emphasized that these signals still require confirmation with higher closing prices and more defined patterns.

Technical Indicators Converge: RSI and Oversold Conditions Support Bullish Scenario

In a notable technical convergence, ChartNerd identified that both RSI and Stochastic RSI are operating in oversold territory following the recent decline. These extreme levels have historically preceded rebounds when buyers start absorbing the accumulated selling pressure.

The monthly context adds nuances to this analysis. XRP’s monthly RSI hovers around 54, a slightly positive reading. ChartNerd interprets that if the price drops slightly and RSI falls toward 50, this could simply represent consolidation within a larger bullish trend rather than the beginning of a deeper collapse. The key support identified would be around $1.90, a level that could be tested before a possible rebound.

Macro Context and Market Outlook

The FOMC decision aligns with policymakers’ efforts to balance inflation progress with concerns about economic growth and employment. This third rate cut of the year has prompted market participants to reevaluate their positions in risk assets, including cryptocurrencies.

At the current price of $2.05, XRP recovers marginally from recent lows but remains under short-term pressure. The convergence of the inverted hammer candle on the weekly chart along with oversold indicators suggests that technical traders see an opportunity window. If the macroeconomic environment stabilizes and buyers demonstrate conviction at these levels, a rebound toward higher resistances could materialize, especially if demand for cryptocurrency ETFs resurges.