• 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.

Join Telegram

Recommended content

Recommended Content

Editors’ Picks

Convex Finance extends gains after facing short squeeze

Convex Finance extends gains after facing short squeeze

Convex Finance (CVX), the DeFi token, extends its rally to double-digit gains and raises 26% on Monday, as seen on Binance. Data from Coinglass shows large volume liquidation of short positions, to the tune of $722,000. 

More Cryptocurrencies News

XRP stuck below $0.50 while SEC abandons demand for $2 billion penalty

XRP stuck below $0.50 while SEC abandons demand for $2 billion penalty

XRP struggles to make a comeback above sticky resistance at $0.50 on Monday as traders continue to assess the legal skirmishes between blockchain firm Ripple and the US Securities and Exchange Commission (SEC).  

More Ripple News

Quant price poised for a short-term sell-off amid potential early-holder selling spree

Quant price poised for a short-term sell-off amid potential early-holder selling spree

Quant (QNT) price could have a short-term downward pressure. Data from Lookonchain suggests that an early holder has deposited 118,008 QNT tokens worth $9.78 million into the Kraken exchange.

More Cryptocurrencies News

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Bitcoin retesting its major resistance level

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Bitcoin retesting its major resistance level

Bitcoin price is retesting its weekly resistance level of $67,147. Ethereum price finds support around $3,321, the price imbalance between $3,146 and $3,498. Ripple price faces rejection due to the key resistance level of $0.499.

More Cryptocurrencies News

Bitcoin: Has BTC found a local price bottom?

Bitcoin: Has BTC found a local price bottom?

Bitcoin (BTC) price looks set for a mild fall this week, weighed by slight outflows in the US spot ETFs and the US Fed keeping a hawkish interest-rate outlook despite easing inflation. Technical indicators suggest that BTC could face a further 5% correction in the short term before resuming the uptrend.

Read full analysis