2023-5-9 20:30 |
The price of Ripple’s XRP has lost a crucial support level which puts the entire previous bullish structure at risk.
Additionally, the short-term readings and price action support the possibility of more downside. While there is still hope for the XRP price, a bullish reversal must begin immediately in order for the bears to relinquish control.
There is no news regarding the drawn-out Ripple Labs vs SEC case. However, due to the lack of a court settlement, it is possible that Coinbase will delay a potential XRP listing.
Ripple Price Loses Crucial Support LevelSince June 2022, the price of XRP has been trading within a long-term ascending parallel channel. This pattern involves the price moving between two parallel resistance and support lines.
It is typically seen as bearish, suggesting a breakdown is likely to occur.
On March 29, the channel’s resistance line rejected the price (red icon), causing the current downward trend. Shortly after, the price dropped below the $0.53 horizontal area and confirmed it as resistance (red icon).
Both of these factors are considered bearish and often lead to downward movements.
Starting on April 21, XRP reached the channel’s midline (red circle) and bounced. This allowed for the bullish structure to remain intact.
However, the ensuing drop on May 7 caused the digital asset to lose midline support, suggesting that the trend is bearish.
XRP/USDT Daily Chart. Source: TradingViewAdditionally, the Relative Strength Index (RSI) provides a bearish reading. When evaluating market conditions, traders use the RSI as a momentum indicator to determine whether a market is overbought or oversold and whether to accumulate or sell an asset.
If the RSI reading is above 50 and the trend is upward, bulls still have an advantage, but if the reading is below 50, the opposite is true.
The indicator is below 50 and broke its bullish divergence trendline (green line). So, the daily price action and indicator readings suggest that the trend is bearish.
XRP Price Prediction: Where Will Price Find Support?The technical analysis from the short-term six-hour chart supports the possibility of more downside. The main reason for this is the ongoing breakdown from the 0.618 Fibonacci retracement level.
According to the Fibonacci retracement levels theory, following a significant price change in one direction, the price is expected to partially return to a previous price level before continuing in the same direction, and this theory can also be used to identify the peak of the future upward movements.
The 0.618 Fib level is crucial and often acts as the bottom during corrections. The fact that the XRP price broke down below it aligns with a bearish XRP price forecast.
Next, the price trades in a descending parallel channel, falling below its midline (red circle). As outlined previously, this is considered a bearish sign.
If the drop continues, XRP is expected to reach the next closest support at $0.40, created by the channel’s support line and a horizontal support area.
XRP/USD Six-Hour Chart. Source: TradingViewHowever, an increase above the short-term channel’s midline will mean the trend is still bullish. In that case, an upward movement toward $0.480 will be expected.
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The post Can Ripple (XRP) Price Recover After Breaking Critical Support? appeared first on BeInCrypto.
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