XRP is flashing a counterintuitive signal that smart traders love: a Bearish Butterfly on the 4-hour chart that often powers a bullish CD leg toward a Potential Reversal Zone (PRZ) before any true trend shift. With price rebounding from $2.32, reclaiming the 100-hour MA, and eyeing the 50-hour MA near $2.6897, the next decisive move could set up a high-probability test of $2.77–$2.93—or fade into consolidation if momentum slips.

XRP’s Harmonic Setup: What’s Forming Now

XRP has carved out a Bearish Butterfly that began at X ≈ $2.6479, progressed through A and B, then retraced to C ≈ $2.3209 before launching the CD leg higher. Price now hovers around $2.55, with bulls regaining control above the 100-hour MA50-hour MA (~$2.6897) would typically validate continuation toward the PRZ: $2.7726 (1.272) to $2.9311 (1.618) Fibonacci extensions.

Why This Matters to Traders

Harmonic patterns offer rule-based targets and invalidations, helping traders codify risk and reward. In a mixed market (BTC green, ETH softer), XRP’s relative strength and structure can present asymmetric opportunities: defined upside into the PRZ versus clear levels where the setup breaks down.

Key Levels and Triggers to Watch

• $2.6897 (50-hour MA): Strong 4H close above this level, ideally on rising volume/open interest, favors continuation of the CD leg.
• PRZ $2.7726–$2.9311: The 1.272–1.618 extensions where the Butterfly typically completes; expect supply and fading momentum risk.
• 100-hour MA pivot: Holding above keeps the bull bias intact; loss of this support raises consolidation risk.
• $2.3209 (Point C): A loss and acceptance below C undermines the bullish CD scenario and widens downside risk.

Actionable Trade Planning

• Breakout-Confirmation: Wait for a 4H close above $2.6897, then look for a low-volatility retest/hold to target the PRZ, scaling risk as price approaches $2.77–$2.93.
• Pullback-Continuation: If price retests the 100-hour MA and holds, a higher-low entry can offer improved R:R toward the same targets.
• Risk Controls: Keep position risk small (e.g., 0.5–1.5% per idea); place invalidation below the 100-hour MA or more conservatively below $2.3209.
• Execution Hygiene: Use alerts at $2.69, $2.77, and $2.93; monitor BTC volatility and XRP funding/spot-premium for signs of overheated momentum.

Risks That Could Flip the Bias

Thin liquidity pockets, sudden BTC drawdowns, or headline risk can invalidate harmonic projections. If XRP fails to hold the 100-hour MA or rejects hard at the 50-hour MA, expect range-bound chop and slower setups. Always reassess if price re-enters below $2.32.

Bottom Line

The Bearish Butterfly doesn’t mean “short now”—it often means “ride the CD leg” into the PRZ with disciplined targets and tight invalidations. For XRP, that translates to watching $2.6897 for confirmation and managing exits into $2.77–$2.93, while guarding downside with clear stops and sizing.

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