XRP drops to 2022 support: When will bulls see respite?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- July gains were at risk as XRP dropped by over 35% in four weeks.
- The Open Interest rates dipped as sellers gained more control.
In July, the massive Ripple’s [XRP] pump, after the partial legal win against SEC, saw it tuck +70% gains after hitting a high of $0.94. However, the bearish grip seen from mid-July is far from over and threatens to clear last month’s gains.
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But the steady pullback afterward has stretched into August and threatens to clear the rest of the gains.
However, the drop has reached a crucial support zone established in 2022. It prompts the question; will the support zone induce sellers to exit the market?
Will the 2022 support stop the drop?
On the weekly chart, the $0.5600 – $0.6575 (cyan) was a support zone between July-December 2022. It was also a weekly bullish order block over the same period. But it was flipped to resistance in Q2 2023, only to be cleared in Q3.
At the time of writing, XRP had dropped to the same zone, shedding over 35% after a price rejection at $0.94. A liquidity hunt beyond the zone to $0.5 was likely in the next few days/weeks. But a rebound towards $0.90 could be feasible if the zone is retested as support.
Conversely, sellers could push XRP to $0.41 or $0.30, especially if Bitcoin [BTC] loses hold of $28k and drops further.
The RSI has remained above the median mark since April, showing that buying pressure has been moderate since Q2. But the Chaikin Money Flow (CMF) eased below zero at the time of writing, underscoring capital outflows in the past few days.
Sellers consolidated more control
Between 15-16 August, XRP’s CVD (Cumulative Volume Delta) went southwards, demonstrating that sellers had more market control before and after the release of FOMC Minutes.
How much are 1,10,100 XRPs worth today?
The sharp drop in Open Interest (OI) rates from >$680 million to around $580 million over the same period further reinforced the bearish grip.
Despite the slight improvement recorded at the time of writing, the OI and CVD didn’t flash signs of price reversal yet. So, tracking BTC movement is crucial before making moves.