Here’s why XRP price plummets; will it be able to recover its bullish structure?
The XRP price significantly dropped during the trading session on the cryptocurrency market by more than 9.5%, reaching its lowest point since the end of March at $0.471. All of the gains the token had made over the previous three weeks were reversed by this collapse.
CoinMarketCap reports that XRP’s trading volume has increased since the previous day and is now $1.17 billion. In comparison, its market capitalization has dropped by more than $1.5 billion during the current market turn and is currently at $25.41 billion. At the time of writing, Ripple’s native token is changing hands at $0.4973.
XRP/USD 4-hour chart | Source: TradingView
XRP price plummets as monthly gains are wiped out in mere minutes
On April 19, the price of XRP plunged precipitously as a key resistance level rejected it. Since March 21, when it emerged from a downward resistance line, the price of XRP has risen. The line’s breakout indicated that the previous correction was over. On March 29, it resulted in a new yearly high of $0.585.
The reason for this significant adjustment is still unknown despite the numerous theories floated in the crypto world. Some contend that before the next phase of expansion, it could be necessary to weed out and eliminate the greediest and tardiest investors. Some people think the market is already pricing in future occurrences that may bring about some important news shortly.
In the interim, there has been news regarding XRP, albeit indirectly. The community is debating yesterday’s interrogation of SEC chairman Gary Gensler in Congress. The announcement that a measure to reform the Securities and Exchange Commission (SEC) and remove the existing chairman had been introduced piqued the community’s interest. The wave count offers promise for a potential reversal despite the decline, provided that the price bottoms out soon.
Can XRP get back to its bullish structure?
The short-term six-hour count’s technical analysis predicts a bullish trend for the price of XRP. The wave count is the main cause of this. Technical analysts employ the Elliott Wave theory as one of their tools. The direction of the trend is determined by repeated long-term price trends and investor psychology.
It suggests the current price is in the fourth wave of a five-wave increase (white). This suggests that the price of XRP will rise in the future and may even surpass the $0.525 barrier level to reach $0.650.
The price action of the fourth wave will determine the direction of the subsequent trend. A bounce at the 0.5 Fib retracement support level is the pattern the corrective wave would most likely follow to completion.
XRP/USDT six-hour chart | Source: TradingView
According to the theory behind Fibonacci retracement levels, after a significant price advance in one direction, the price will first partially retrace to a previous price level before continuing in the same direction. Also, they can be used to estimate the peak of upcoming rising moves.
Thus, if the optimistic XRP price prediction comes true, the price of Ripple may rise to the $0.650 resistance level. It is also the 1.61 Fib of wave four in addition to being a horizontal resistance area (black). This convergence suggests that the region will serve as the top.
However, this bullish wave count would be invalidated if the price dropped below the wave one high at $0.433 (red line). The XRP price may then decline to the $0.37 horizontal support zone.
- XRP Price Is Calming Down And Entering A Pattern That Can Become A Starter For The Next Rally
- XRP Is Increasingly Supported By Many Exchanges And Accepts Payments On A Large Scale