XRP Price Analysis: Potential Downtrend Ahead
XRP’s price recently fell below the crucial support level of $0.50 and the 50-day simple moving average (blue line). Additionally, it broke through an important contracting triangle with support at $0.510 on the daily chart, indicating a potential medium-term downtrend with a possible drop towards the $0.4150 support level.
XRP failed to overcome the resistance at $0.550 and has since struggled, settling below $0.50 and facing the risk of further downward movement.
In previous analyses, we highlighted the significance of a contracting triangle on XRP’s daily chart. Despite multiple attempts by the bulls to surpass the $0.550 resistance and the 50-day simple moving average, there was a lack of substantial bullish momentum compared to Bitcoin and Ethereum. Consequently, a strong bearish reaction ensued, leading to a decline below the key $0.50 support level and the crucial contracting triangle at $0.510 on the daily chart.
The price also dropped below the 50% Fibonacci retracement level of the upward move from the $0.4154 swing low to the $0.5707 high, indicating a clear breakdown and a daily close below $0.50 on the daily chart. Currently, the price is consolidating losses below the triangle trend line.
In the short term, XRP may experience a recovery wave to test the same triangle zone, now turned into resistance, at $0.500 and $0.510. Failure to push the price above $0.510 could result in a fresh decline.
Immediate support is expected near the $0.4740 level, followed by major support at $0.4520 and the 76.4% Fibonacci retracement level. If the price continues to slide, the next key support lies at $0.4150, with a potential further drop towards the $0.400 support level. A break below $0.400 could pave the way for more losses, potentially leading the price towards the $0.3450 level.
Despite the bearish outlook for the price, Ripple’s fundamental growth remains strong. The recent introduction of the USD (RLUSD) stablecoin, backed by a 1:1 USD reserve, offers transparency and stability on the XRP Ledger and Ethereum.
Looking ahead, XRP’s price may gradually recover and reclaim the $0.510 level, with major resistance at $0.520 and the 50-day simple moving average. Breaking above the $0.550 resistance could spark a fresh surge, potentially pushing the price towards $0.620 and even the $0.6660 resistance zone. Ultimately, if the bulls maintain momentum, the next target could be $0.700.
In conclusion, XRP’s price is currently indicating a significant bearish breakdown below $0.50, suggesting further downside potential towards $0.40 unless there is a daily close above $0.510 and $0.520 in the near future.