• XRP price tags 78.6% Fibonacci retracement of the December 2020-April 2021 advance.
  • Daily Relative Strength Index (RSI) strikes an oversold reading, similar to the December 2020 and March 2020 lows.
  • Ripple 50-week simple moving average (SMA) now in play, having served as support on several occasions.

XRP price is down over 70% from the April high and 50% from the June 1 rebound high at the time of writing, creating a challenging price structure to extract meaningful gains on a sustainable basis. However, today there is a convergence of three technical indicators that may signal that Ripple is near a new trading low or the beginning of a slow process of building an investable low for a new bull market.

XRP price endures by balancing close to the abyss

Before the current sell-off, XRP price had displayed a similar passiveness and lack of direction as many altcoins. Ripple was not inspired by the 30% rally in Bitcoin price, instead favoring to be range-bound between two imposing levels, the neckline of an inverse head-and-shoulders pattern at $0.76 and the psychologically important $1.00. 

The range had not been accompanied by any signs of accumulation or distribution, raising the probability that XRP price would remain locked in the governing price range for the foreseeable future.

Over the last two days, the range resolved, and XRP price has fallen almost 34%, registering the largest two-day decline since December 2020 when the SEC case hit the news roll. As a result, Ripple has realized three important technical milestones: a test of the 78.6% retracement of the December 2020-April 2021 advance at $0.555, a touch of the 50-week SMA at $0.539 and marked an oversold reading on the daily RSI.

In the first Ripple chart below, the test of the 78.6% retracement and the RSI oversold condition is highlighted.

XRP/USD daily chart

XRP/USD daily chart

The 50-week SMA is an important technical indicator for evaluating extreme deviations from the mean, macro oversold conditions and rally sustainability off significant lows. In the current Ripple case, the smoothed trend line has emerged as support. Therefore, if XRP price is to rebound, it should be around this price area.

XRP/USD weekly chart

XRP/USD weekly chart

The sharpness of the current XRP price decline was too much for the May 23 low at $0.652 to contain. Still, the extension of the sell-off has now triggered three technical indicators that suggest a bottom has been reached, thereby stacking the probabilities in favor of at least a dead-cat bounce and potentially an investable low for committed Ripple investors. 


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Recommended content


Recommended Content

Editors’ Picks

Crypto Today: Bitcoin is less than 10% away from all-time high as Ethereum ETF approval anticipation brews

Crypto Today: Bitcoin is less than 10% away from all-time high as Ethereum ETF approval anticipation brews

Bitcoin trades around $68,000 early on Monday, less than 10% away from its all-time high of $73,777 on Binance. Ethereum ETF anticipation brews among traders and Ether investment products see inflow of over $45 million in the past week. 

More Cryptocurrencies News

Ripple lawsuit settlement likely soon, says Brad Garlinghouse, XRP hovers around $0.60

Ripple lawsuit settlement likely soon, says Brad Garlinghouse, XRP hovers around $0.60

Ripple (XRP) trades around a key psychological level of $0.60, early on Monday. The altcoin recently made headlines for its highest weekly gain of 2024, over 40%. XRP sustained nearly 21% of the gains from the last seven days. 

More Ripple News

Solana could cross $200 if these three conditions are met

Solana could cross $200 if these three conditions are met

Solana’s total value locked climbs 18% in July to $5.38 billion, as seen on DeFiLlama. Solana sustains over 20% gains in the past seven days, corrects nearly 3% on Monday. Active addresses and new address count in the Solana network have increased throughout July.

More Solana News

ALT, WLD, ENA, ID set for $200 million token unlocks next week

ALT, WLD, ENA, ID set for $200 million token unlocks next week

The crypto market is set to experience another wave of token unlocks next week, with Altlayer (ALT), Worldcoin (WLD), Ethena (ENA), and Space ID (ID) set for a combined token unlock worth about $200 million.

More Cryptocurrencies News

Bitcoin: Will BTC continue its bullish momentum?

Bitcoin: Will BTC continue its bullish momentum?

Bitcoin (BTC) price increased by 5.5% this week until Friday after breaking above a descending trendline. Currently, it is trading slightly higher by 0.23% at $64,166.

Read full analysis

BTC

ETH

XRP