XRP Technical Setup on August 3rd: Doji Candlestick Pattern Signals Mixed Signals Ahead

Key Price Levels and Risk Management

Before diving into the technical picture, traders need to understand the critical support and resistance zones. XRP is currently trading around $1.85, having recently tested the psychological 3.00 level. The primary support zone lies between 2.80 - 2.95, with a deeper floor at 2.70 if selling intensifies. On the upside, resistance emerges at 3.30 and 3.35, with a potential breakout target at 3.60 - 3.65 representing approximately 20% upside from resistance penetration.

Technical Formation Analysis: Convergence of Multiple Signals

The 4-hour timeframe reveals a tightening descending wedge formation, where price action has rebounded sharply from the lower boundary. This rebound coincides with the 200-period exponential moving average, creating a confluence of support that suggests institutional buying interest is active at these levels.

The daily chart presents a compelling doji candlestick pattern—a classic reversal indicator—which typically reflects hesitation between buyers and sellers with the eventual edge going to demand-side participants. This formation, combined with the RSI displaying a higher low during the recent price decline, constructs a bullish divergence setup. In plain terms: while price made fresh lows, momentum indicators failed to confirm, signaling weakening selling pressure and potential capitulation among weak hands.

Trading Strategy Framework

Aggressive Approach: Position traders looking for upside participation should watch for an effective break above 3.30 with robust volume confirmation. Entry on such a breakout targets the 3.60 - 3.65 zone with risk management stops positioned below 3.1. Alternatively, if tonight’s session produces a reversal candlestick—specifically one with an extended upper shadow rejecting higher prices—consider establishing a counter-trend short position with stops above 3.35.

Conservative Approach: Risk-averse traders should await both a successful wedge pattern breakout AND a retest of the breakout level before committing capital, placing stops below the retest low. Those uncomfortable with current volatility dynamics may opt to remain sidelined, waiting for either: (1) a decisive 3.30 penetration accompanied by volume expansion, or (2) stabilization within the 2.80 - 2.95 support band following any pullback, before establishing fresh exposure to the upside thesis.