XRP price on edge of cliff as Ripple faces imminent collapse
- XRP price falls below key Ichimoku levels on the weekly chart.
- Key oscillator divergence may hint at near-term support.
- The threat of a 34% drop, however, remains likely.
XRP price followed the rest of the cryptocurrency market lower over the weekend. The US Thanksgiving holiday gave cryptocurrency traders and investors some early Black Friday deals, but downside risks remain.
XRP price drops below weekly Ichimoku Cloud, threatening flash crash conditions
XRP price completed the most bearish weekly candlestick close within the Ichimoku system since the week of February 28th, 2020, last week.. The candlestick closed below its final Ichimoku support level, the Kijun-Sen ($0.957). XRP now has very little support structure remaining and will now rely on the Chikou Span as its final hope of support.
The saving grace for XRP bulls is where the Chikou Span is positioned. For an Ideal Bearish Ichimoku Breakout entry to occur, the Chikou Span must be below the bodies of the candlesticks and in open space. Open space is a condition where the Chikou Span won’t intercept the body of any candlesticks horizontally over the next five to ten periods. For the open space condition to be accurate, XRP price would need to close at or below $0.59.
Some bullish warning signals are flashing, however, and could trigger some covering by short-sellers. Currently, XRP price has bounced off the 38.2% Fibonacci retracement at $0.84 to return above the Kijun-Sen. Another factor contributing to the bounce is the Chikou Span moving above the body of the candlesticks for the first time since the August 13th weekly candlestick.
XRP/USDT Weekly Ichimoku Chart
There is an almost imperceptible hidden bullish divergence between the candlestick chart and the Composite Index. Hidden bullish divergence is when an oscillator creates lower lows while the price chart creates higher lows. Only valid if the prior trend was up - hidden bullish divergence is an early indicator that the prior uptrend will continue. Contributing further to some near-term support is the Relative Strength Index holding the oversold levels of 50 and 40 as support.
Bulls ultimately need XRP price to close at or above the $1.18 level to establish a clear and renewed bull market.
Author
Jonathan Morgan
Independent Analyst
Jonathan has been working as an Independent future, forex, and cryptocurrency trader and analyst for 8 years. He also has been writing for the past 5 years.
