In my opinion, the Ripple price is at the most important crossroads in the last three years. What comes next has serious implications for the XRP price.
Ripple is tanking. At $0.5240, XRP is 10% lower in the last 24 hours and down 16.32% in the last seven days.
Bitcoin’s reversal below $30,000 this morning is weighing heavily on altcoins. This latest round of liquidation has wiped over $200 billion in value from the cryptocurrency market, reducing XRP’s market cap from $29.5 billion to around $24b in the last week alone.
This weakness has resulted in the Ripple price tracking back to the support of its 2021 uptrend at $0.5108. And whether this support holds relies on how BTC fares below the important $30,000 marker.
There can be no doubt that sentiment in the cryptocurrency market is at a low point. Furthermore, if prices plumb new depths in the next few days, the mood will turn sour still.
But with confidence in the sector this low, how much worse can it really get?
XRP price analysis
A clear triangle formation is visible on the daily price chart. The top end of the pennant is seen at $0.5700 and is a major resistance level.
However, countering this downtrend is a more significant rising trend line from the December 2020 low of $0.1687. I view this uptrend at $0.5108 as the last line of defence ahead of XRP crashing to February’s $0.3616 low point.
Furthermore, the 50-day moving average at $0.7330 has completed a bearish death cross and is now below the 200 DMA at $0.7542.
Should the Ripple price break below the major support, sell-stops will likely be triggered. Additionally, momentum-chasing, systematic selling will follow. This could result in a sharp shock lower for the price.
However, the Relative Strength Index (RSI) is breaking down, and an extension south could drag its current reading of 30.10, deep into oversold territory.
Furthermore, I question who will actually stop out. XRP was trading at $1.9840 three months ago. Surely if you were going to throw in the towel, it would have been at a much higher level than here. In most cases, I expect holders to weather the storm and “bottom drawer’ the position.
Therefore, while things may worsen in the short term, I don’t believe the outlook is as apocalyptic as some imagine.
Furthermore, if XRP trades above $0.5700, the breakout is on the upside. In this event, the tightly bunched 50 and 200 DMA’s between $0.733 and $0.7542 are the obvious targets. Following that, $1.000 is back on the table.
So the next couple of days will prove very interesting. In my mind, both the bulls and the bears have everything to play for.