Ripple investors are facing challenging market conditions as XRP enters consolidation
|- XRP price has been massing losses since Christmas, already accounting for 33%.
- Price action sees a pick-up in buying volume as a floor is created around $0.31.
- As bulls start to reclimb from the lows, a squeeze looks to unfold with a possible break of the downturn in the coming days.
Ripple (XRP) has been in a downtrend since Christmas and has investors worried at the beginning of 2022. The sell-off, sparked by worries about rising interest rates in the U.S., has formed a solid downtrend, highlighted by the red descending trend line, and supported by the cross of the 55-day Simple Moving Average (SMA) below the 200-day (SMA).. Bulls could turn the tables in coming days, however, as they push higher (green trendline) and press up against the red ascending trend line. A change in market risk sentiment towards risk-on could then see a breakout and return towards $0.78.
XRP will start recovery once market sentiments shift back to risk on
XRP price has been hammered by a broad sell-off that has pushed the stars out of favor of any bullish reaction. The most significant weight comes from the downtrend since Christmas, marked by the red descending trend line. The crossing of the 55-day SMA below the 200-day SMA is called a death cross that will keep big investors out of the trade given how bearish it is..
A floor appears to be forming, however, as the lows slowly grind higher forming a floor from January 5 and brave bulls do have some incentives to now start entering at an extended position. The Relative Strength Index (RSI) is hovering near the oversold area but starting to flatline, which indicates bulls have a good window of opportunity to enter as more short-sellers will refrain from entering the market right now, as any possible profits will be expected to be minimal. Once global markets start to shake off their current turmoil, expect XRP to quickly see a bullish pick-up of buying volume that could help it break above the red ascending trend line, and move towards the first target at $0.78.
XRP/USD daily chart
XPR price is likely to further increase buying volume once it reaches $0.78 and push higher up to the monthly pivot at $0.84. A further continuation could be on the cards if markets rally and have a few consecutive days of gains. As all this depends on global market sentiment, expect a break of the green ascending trend line to push price further to the downside in search of any support, which could not be seen until $0.62 or even $0.58 with the green longer-term supporting level and the S1 monthly support level.
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