• Ripple price has likely bottomed out, with both the RSI and the ADX indicators showing the prevailing trend strengthening.
  • XRP could ascend to the $0.6500 level amid rising momentum and the filing of the insufficiency in the market (FVG).
  • The bullish thesis will be invalidated if the payment token’s price breaks and closes below the $0.5580 support level.

Ripple (XRP) recorded a massive dip during the Wednesday trading session, but this has turned out to be a healthy correction as it saw the payments token fill an imbalance in the XRP market. Now, the upside potential may come to fruition with multiple trend strength quantifiers showing rising momentum. 

Also Read: XRP price hit a three-year low against Bitcoin as fears of Spot BTC ETF rejection span the market

XRP dip on Wednesday was a healthy correction

Ripple (XRP) price hit a three-year low against Bitcoin on January 3, coming on the back of a widespread sell-off triggered by a blog suggesting the US Securities and Exchange Commission (SEC) would reject spot BTC exchange-traded funds.

The XRP/USD three-month low at $0.5000 saw Ripple price fill an imbalance or inefficiency in the market, represented by the Fair Value Gap (FVG) between $0.4927 and$0.5111. An FVG is significant as it represents errors in the market, and the price always tends to revert to these areas and fill the gap with some more trades.

With the FVG filled, the XRP price appears ready to recover, with multiple trend strength quantifiers, the Relative Strength Index (RSI) and the Average Directional Index (ADX) indicators showing growing bullish effort.

When the RSI is moving north, it means momentum is growing, while the ADX quantifies strength. When the ADX line rises, it means the trend strength is increasing, so the prevailing trend will continue. However, when the ADX line is falling, the trend strength in question is decreasing and the asset’s price could enter a retracement or consolidation period.

Meanwhile, XRP is among the altcoins that are benefiting from the abounding hope that the US SEC will ultimately approve the spot BTC ETF applications. Evidence of this hope can be seen in the latest development, where the filers, among them VanEck, Grayscale and Fidelity,  have filed for registration of securities with the financial regulator. The approval hype momentum appears to be in full swing after the SEC met with NYSE, NASDAQ, and CBOE exchanges to discuss the spot BTC ETF.

Ripple price readies for a possible 20% climb

With the inefficiency in the market filled, Ripple price is poised for a recovery, with the RSI showing rising momentum and the ADX showing that the ongoing recovery is steadily gaining strength.

Increased buying pressure above current levels could see Ripple price restore back within the fold of the rising wedge above the $0.6000. Further north, the price could extend to shatter past the upper boundary of the rising wedge to tag the $0.6500 level.

In a highly bullish case, the gains could extend for Ripple price to collect the sell side liquidity residing above to tag the $0.7000 psychological level. Such a move would constitute a 20% climb above current levels.

XRP/USDT 1-day chart

Early profit booking from traders that suffered Wednesday’s losses could see XRP price push south, potentially revisiting the FVG. A break and close below the midline of this order block at $0.5023 would confirm the continuation of the downtrend, with an extended fall likely to see XRP market value hit the range low at $0.4174. 


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


Recommended Content

Editors’ Picks

Bitcoin rebounds as South Korea martial law proves short-lived

Bitcoin rebounds as South Korea martial law proves short-lived

Bitcoin recovers slightly, trading above $96,000 on Wednesday, after its recent dip on Tuesday due to the political strife in South Korea. With the crisis seeming to be mostly over, BTC recovered more as the reversal of the martial law restored confidence in crypto markets. 

More Bitcoin News
Curve DAO price surges above $1, highest level since April 2023

Curve DAO price surges above $1, highest level since April 2023

Curve DAO extends gains by more than 30% on Wednesday, rallying 70% so far this week and reaching levels not seen since April 2023. On Tuesday, the announcement of CRV’s scrvUSD stablecoin launch on the Spectra ecosystem fueled the ongoing rally.

More Cryptocurrencies News
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Cryptomarket stabilizes after South Korea reverses martial law

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Cryptomarket stabilizes after South Korea reverses martial law

Bitcoin hovers near $95,700 on Wednesday, signaling potential weakness as technical indicators suggest a decline, while Ethereum and Ripple stabilize near key levels, hinting at a possible rally following South Korea's reversal of martial law.

More Cryptocurrencies News
Ripple's XRP sees over $4 billion in profit-taking following surge in whale activity

Ripple's XRP sees over $4 billion in profit-taking following surge in whale activity

Ripple's XRP is down 5% on Tuesday after news of South Korea declaring martial law sparked a surge in selling activity and significant profit-taking among investors. However, whales have stepped up buying pressure as the remittance-based token looks to stage a recovery.

More Ripple News
Bitcoin: A healthy correction

Bitcoin: A healthy correction

Bitcoin (BTC) experienced a 7% correction earlier in the week, dropping to $90,791 on Tuesday before recovering to $97,000 by Friday. On-chain data suggests a modest rebound in institutional demand, with holders buying the dip. A recent report indicates BTC remains undervalued, projecting a potential rally toward $146K. 

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP