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How XRP faces a 38% correction as bears make their move

2min Read

Should bulls fail to appear in droves, XRP might have no other option than to shrink.

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  • The supply in profit hit high levels, suggesting a rise in realized gains. 
  • XRP’s momentum remained bearish, indicating a possible significant decline.

XRP fell to $0.55 on the 18th of January, indicating that the token risked dropping below the crucial support zone. Since the new year began, AMBCrypto has tracked XRP’s performance. At press time, it had lost 12.64% of its value on a Year-To-Date (YTD) basis.

But analyst Ali Martines thinks that seller exhaustion won’t occur anytime soon as the price could drop as low as $0.34. If that happens, it would mean another 38% correction for XRP.

No days off for the bears

As stated above, Martinez’s opinion was because of XRP’s slip below the ascending channel. If the price had risen above the channel, XRP could have bounced above the lower boundary. But since it slid, a movement down the chart looked likely.

An assessment of analysis tool Santiment showed that the decline could also be linked to intense profit-taking.

According to data from the crypto intelligence platform, the percentage of total supply in profit was 80%. Though it had dropped from the historical high of 88%, it still posed a risk to the XRP price.

For instance, when the metric was around the same percentage in April 2023, the price fell from $0.53 to $0.42 within a short period. In August of the same year, a similar thing happened.

XRP supply in profit and XRP price

Source: Santiment

An ETF may not come to XRP’s rescue

Should bulls fail to appear in droves, XRP might have no other option than to shrink.

However,  there was speculation that an XRP  ETF could come at some point, and save XRP from correcting. This was because of the response BlackRock’s CEO Larry Fink gave in an interview with Fox Business.

During the interview, Fink said he could not “talk about it” when asked about a possible XRP ETF. But that rumor might have been put to bed now because of new reports.

According to Charles Gasparino, a senior correspondent at Fox Business, BlackRock does not have plans to launch a spot XRP ETF.

As of this writing, AMBCrypto confirmed that XRP had fallen below the crucial $0.55.  We then looked at the Directional Movement Index (DMI). This was to ascertain if there was any chance of recovery in the short term.

But on looking at the DMI, we discovered that the -DMI (red) was 26.77 while the +DMI (green) was 14.46. This position was considered bearish for the token.

Also, the -DMI seemed to have the backing of the Average Direction Index (ADX).

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The ADX (yellow) closed on 25, and if it surpasses the reading while the -DMI remains higher, XRP’s first stop could be $0.50.

Furthermore, the indication from the RSI was gloomy as the reading dropped to 36.18.

XRP price analysis on the daily chart

Source: TradingView


Victor Olanrewaju is a full-time journalist at AMBCrypto. Settled in Lagos, his fascination with blockchain technology and the cryptocurrency market arose out of his love of freedom and everything free. As a Nigerian, Victor understands the impact unfounded financial restrictions have on a population. He sees Bitcoin and cryptos as a way to circumvent these obstacles, as a tool for value creation despite all the setbacks. A graduate in Physics, Victor previously worked as a Senior Marketer at Melange Technologies. Before that, he dealt with crypto-marketers on a regular basis in his capacity as Copywriter at Ventrix Media. At AMBCrypto, Victor’s focus is on assessing the real effectiveness of both on-chain and off-chain developments on a project and its community sentiment.
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