Analysis
XRP faces rejection near $0.56, can bears stage a comeback?
Posted:
| Last updated: January 30th, 2024
Journalist
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- XRP had a strongly bearish outlook after the $0.56 level served as resistance over the past 28 hours.
- A drop below $0.5 could see another significant move downward as the buying pressure was weak.
On 21 August, Ripple [XRP] saw a positive surge in social activity. Social engagement went up, and the price also saw a bounce to the $0.56 resistance. Yet, this price bounce turned out to be short-lived, and XRP slid lower toward $0.5 over the past few hours.
Read Ripple’s [XRP] Price Prediction 2023-24
It was not all doom and gloom despite the downtrend. Whale accumulation was on the rise as prices hovered above the $0.5 mark, which suggested a recovery could be possible. From a price action perspective, evidence for the same has not developed.
The bearish order block from mid-June continues to be important
Source: XRP/USDT on TradingView
On 13 June, the 12-hour chart saw a bearish order block develop. It was beaten by XRP going both upward and downward since then, leaving behind a large fair value gap. Over the past two days, the $0.56 area was tested as resistance once more.
XRP has fallen to $0.517 since then. The OBV did not note a recovery, which indicated selling pressure continued to be strong. The RSI was below neutral 50, the same as it has been throughout August. The reading of 29.5 at press time showed intense bearish momentum was in play on the H12 chart.
The market structure has been bearish since 24 July. In the past three weeks, XRP has lost key levels of support and retested them as resistance. The Fibonacci retracement levels (yellow) plotted based on the July rally showed that the bulls have failed to hold on to the 78.6% level at $0.566.
This meant that a move southward to the 23.6% extension at $0.353 was a possibility. Invalidation of this idea would occur if XRP manages to climb back above the $0.57 resistance level.
Does the rising spot CVD lend credence to the idea of recovery?
Source: Coinalyze
Since 18 August, XRP prices have bounced slowly higher from $0.48 to reach $0.558. It fell back to $0.517, but despite the minor bounce, Open Interest did not see a move higher. It remained flat, which showed sidelined speculators.
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The funding rate stepped higher, showing traders leaned toward long positions.
The spot market painted a different picture to the OI. It has trended upward after 18 August to denote an influx of demand in the market. This could see XRP break above the $0.56 resistance, although the rest of the evidence presented showed otherwise.
