- XRP price is approaching a stable inclined support trend line that could potentially pause the downtrend.
- Things could worsen for the remittance token despite the recent attempt at recovery.
- A daily candlestick close above $0.623 will invalidate the bearish thesis.
XRP price is showing strength as it bounces off a stable support level in line with an uptick in bullish momentum and recovery in Bitcoin price. Investors need to tread carefully, however, as the crypto markets are on the precipice of a capitulation move.
XRP price dips: to buy or to not
XRP price shows two distinctive lower highs on a weekly chart formed in January 2018 and April 2021. Interestingly, an inclined trend line can be drawn connecting the swing points formed in March 2017, March 2020 and December 2020.
While the overall price action might seem like a pennant, it does not meet the two+three criteria for the said setup. For a pennant, there need to be at least two swing highs and three swing lows connecting the trend lines or vice versa.
Although the bear market might seem to have bottomed there is a large amount of risk interwoven into the market and its participants. The fall of the Celsius Network could trigger a domino effect, causing a capitulation move.
For XRP price, if the inclined trend line and the intermediate support level at $0.228 are breached, it will signal a bearish move and trigger a 37% crash to the $0.145 weekly support level.
If this level is breached, all hell will break loose for Ripple as this move would catalyze a crash to $0.062 due to the price inefficiency formed during the 2017 bull run. This nosedive, however, would represent an 80% loss.
Hence, investors need to be careful with buying the dips due to FOMO.
XRP/USDT 1-day chart
The 30-day MVRV Ratio intraday metric is used to track the average profit/loss of investors that purchased XRP over the last month. The current MVRV value is hovering around -24%, suggesting that most of these holders are underwater.
Interestingly, there are five separate instances where the index has tagged this level - September 2021, December 2021, January 2022, May 2022 and June 13. The last three times the 30-day MVRV ratio intraday tagged these levels, XRP price rallied on an average of 27%.
Only the May 12 crash continued to favor the bears even after the on-chain metric hit -24%. Considering that the current situation is, in some ways, similar to the LUNA-UST situation, things could unfold favoring the bears.
 [13.49.26, 14 Jun, 2022]-637907948581214695.png)
XRP MVRV ratio intraday 30-day
On the other hand, if XRP price continues to recover things could change beyond a certain level. If Ripple bulls push XRP to produce a daily candlestick close above the $0.623 resistance barrier, it will flip it into a support floor. This development will invalidate the bearish thesis and will also allow sidelined buyers to step in.
In such a case, Ripple will need to create a higher low to continue the bullish trend and reach the upper trend line at roughly $0.917.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Google, Apple could remove Binance from their app store on Philippines SEC request
The Philippines SEC has requested Google and Apple to remove applications controlled by Binance from their App stores. The exchange’s Philippines-based users are finding the exchange inaccessible to remove their funds.
XRP rallies as Ripple slams SEC for penalties, asks regulator to establish likelihood of future violations
Ripple filed its response to the SEC lawsuit on Monday, arguing that XRP institutional sales before and after the court ruling show no disregard for the law. The firm asks for a civil penalty of no more than $10 million against the $2 billion requested by the SEC.
Here’s why Ondo price hit new ATH amid bearish market outlook Premium
Ondo price shows no signs of slowing down after setting up an all-time high (ATH) at $1.05 on March 31. This development is likely to be followed by a correction and ATH but not necessarily in that order.
PENDLE price soars 10% after Arthur Hayes’ optimism on Pendle derivative exchange
Pendle price is among the top performers in the cryptocurrency market today, posting double-digit gains. Its peers in the altcoin space are not as forthcoming even as the market enjoys bullish sentiment inspired by Bitcoin (BTC) price.
Bitcoin: BTC post-halving rally could be partially priced in Premium
Bitcoin (BTC) price briefly slipped below the $60,000 level for the last three days, attracting buyers in this area as the fourth BTC halving is due in a few hours. Is the halving priced in for Bitcoin? Or will the pioneer crypto note more gains in the coming days?