XRP prices back above $0.5, but here’s why that might not last long
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- XRP was in a retracement after the mid-July rally, but the drop below $0.566 meant the short-term downtrend could extend.
- The Fibonacci retracement and extension levels were important to understand where next the XRP bulls could make a stand.
On 17 August, Thursday, Bitcoin [BTC] fell 12.5% within a day, reaching $25.1k on Binance. This violent wave of selling saw many altcoins holders nuke their holdings in a blind panic. Many assets, including XRP, saw double-digit percentage losses on that day.
Read XRP’s Price Prediction 2023-24
Recovery was not in sight for the crypto market as things stand. Yes, BTC was atop a higher timeframe support zone. But for XRP, its downtrend was strong and the bulls were unable to defend the $0.56 level. It appeared highly likely that further losses could follow.
The downtrend saw XRP bears destroy the $0.55 support zone, can the buyers reclaim it?
The 6-hour chart highlighted the $0.55 zone as a former bullish order block from the H12 chart. XRP prices crashed beneath this zone on 17 August, flipping it to a bearish breaker block. The RSI fell to 9.38 on the H6 chart and was at 28.4 at press time. This denoted intense bearish momentum.
The OBV has also trended strongly downward over the past week. The market structure was bearish on both the daily chart and the 6-hour chart. The fact that the 78.6% level was breached so quickly suggested sellers had the clear upper hand, and more losses were likely.
Therefore, a bounce to the $0.56 level could occur in the coming days, which would likely be followed by rejection. A fair value gap from $0.516-$0.57 could attract XRP to it as the price is attracted to liquidity, before another move downward.
To the south, the 23.6% extension level at $0.353 was a support level that XRP was likely to fall to. However, this could take a few weeks to materialize. The $0.5 zone was psychological support, and it could take a while for the bears to break this area.
The negative funding rate climbs back into positive territory
During the dive in prices late on 17 August, the Open Interest and the spot CVD noted a steep slide southward. The funding rate also fluctuated negatively as short positions dominated the market.
How much are 1, 10, or 100 XRP worth today?
XRP managed to claim the $0.48-$0.5 zone as support over the past two days, and the funding rate began to climb toward 0 and has been slightly positive in the past two days.
The spot CVD has also climbed higher, showing buyers were courageous enough to bid on the asset after the swift losses. The Open Interest did not jump higher, which showed speculators were less convinced than the buyers in the spot market.