Analysis
XRP’s retracement heads to May low – A rebound likely?
Posted:
| Last updated: January 30th, 2024
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Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- XRP’s pullback inched closer to a key demand zone
- Open Interest rates improved after BTC reclaimed $30k
Ripple [XRP] faced another price rejection at the bearish zone and supply area above $0.5000. The stretch above $0.5000 has been a key price ceiling in the first half of 2023, curtailing any hope of further upside.
Read Ripple’s [XRP] Price Prediction 2023-24
In the meantime, BTC was still facing indecision among speculators as it continues tight, narrow price range above $30k. BTC’s wild gyrations in the past week saw XRP hit the 2023 price ceiling. But a retest on the price floor could also be likely if the fluctuations persist.
Will the retracement grace May low?
Source: XRP/USDT on TradingView
The May low falls within the key price zone of $0.407 – $0.434 (cyan). The price zone was a key demand zone in October and Q2 2023. But it was also a key resistance in December and Q1 2023, making it a key price reaction level.
A retracement to the demand zone led to a sharp rally after XRP reclaimed a key low of $0.4493 in May. If the trend repeats and the zone holds, a corrective rebound could set XRP to restest the lower high of $0.527. The level also aligns with a bearish order block (OB) of $0.51- $0.54 (red).
A breach of the demand zone will invalidate the bullish thesis. The next lower supports below the demand zone exist at $0.3472 and $0.3000.
Meanwhile, the RSI was deep in the lower ranges; denoting buyers lost ground to sellers in the past few days. Similarly, the OBV dipped slightly but overall on an uptrend since early 2023.
Open Interest rates improved
Source: Coinalyze
From 22 June, XRP prices decreased while Open Interest (OI) rates fluctuated below $440 million. The OI dropped below $400 million on 28 June. Taken together, it shows increasing bearish sentiment in the past few days.
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However, the CVD edged higher only to flat out as of press time. The bearish sentiment still prevails, with OI yet to exceed $400 million.
