Three technical factors suggesting XRP price an extended dive towards $0.15, fall 35% below the current rate
The XRP price has risen more than 25% by 2020. However, it seems the fourth-largest cryptocurrency by market cap is still looking to dampen that already modest capital gain.
XRP price will drop by about 35% – why?
Based on three technical factors: Long-term moving average, Bearish Divergence between price and momentum, and the death cross. Together, all three exhibits an extended bearish rally towards $ 0.15, the familiar level of support below 35% from current rates.
Ripple chart shows XRP/USD in a large downtrend move | Source: TradingView.com
At first, TradingView’s analyst focused his analysis from a trace of the lower highs and lows left by the XRP/USD pair since 2018. The pair recently broke out of the channel down (in blue), but a robust bullish rejection near the 200-week MA threatens to push it back in the range.
“You can see that price first fell below 200-WMA (in purple) in the summer of 2019. XRP has consistently failed to rally back above the 200-WMA. It has been rejected there on the past three major attempts.”
He combined XRP’s downtrend – especially the recent bearish wave – with an improving Relative Strength Index (RSI). XRP’s weekly RSI moves higher – a sign of higher buying momentum – though its spot rate tends to be lower.
The analyst shared:
“That’s a bearish divergence that could lead to weakness in the coming weeks. Although, there has already been a breakdown of the divergence on the RSI.”
XRP is also trading downward under the influence of the Death cross. This is a bearish indicator that occurs when a short-term moving average (such as MA50) cuts down a long-term moving average (such as MA 200). In the case of XRP, its 200-WMA (purple) weekly spiked compared to 50-WMA (blue) in January 2020, creating a Death cross.
XRP/USD’s 200-WMA jumped above its 50-WMA | Source: TradingView.com
The analyst emphasized:
“It is a sign of prolonged weakness.”
In addition to these three reasons, lower trading volume and volatility also put XRP’s latest bullish move into questionable periods. XRP has attracted fewer traders in the past two years. That could have to do with an ongoing class-action lawsuit against its parent company, Ripple Labs, over whether XRP is a security or not.
Furthermore, Ripple also reported its lowest quarterly sales in the first quarter of 2020, selling just $ 1.75 million XRP.
- Ripple’s Marcus Treacher: Transnational Payments Are On The “Cusp Of Transformation” Thanks To RippleNet And ISO Standardization
- Ripple CEO Brad Garlinghouse Criticized India’s Government For Its Plan To Curb Cryptocurrency Trading