Ripple did not escape the decline in the crypto market this first month of the year. Let’s see the future outlook for the XRP price.
Status of Ripple (XRP)
After rebounding from $0.47, XRP price peaked around $0.73. It was at this price level that it began to weaken, eventually settling below its previous high at $0.55. Currently, XRP is in an area where significant trading volume has been recorded. This could indicate that the cryptocurrency is in a key area, showing strong interest from investors.
At the time of writing, XRP is trading around $0.51. Although Ripple’s medium-term trend appears to be bullish, the 50 and 200 day moving averages leave something to be desired. Indeed, without forming a ‘death cross’, they are currently above the current price, which could indicate the possibility of a trend reversal. This development encourages investors to be more vigilant. Concerning the oscillators, they are now below their median threshold, suggesting that the price of Ripple could be in a state of oversold. From an optimistic perspective, this could indicate that Ripple is undervalued. However, from a pessimistic point of view, this could signal a potential shift in momentum towards a downtrend. That being said, a bullish divergence seems to be emerging on the daily RSI.
The current technical analysis was carried out in collaboration with Elie FT, a passionate investor and trader in the cryptocurrency market. Today trainer at Family Tradinga community of thousands of own-account traders active since 2017. You will find Lives, educational content and mutual assistance around the financial markets in a professional and warm atmosphere.
Focus on Ripple derivatives (XRP/USDT)
In the first week of January, XRP’s open interest decreased by approximately -36%. This represents a removal of approximately $174 million from XRP/USDT perpetual contracts. Since that time, open interest has fluctuated in the same way as its price. This therefore suggests a return of traders a priori predominantly on the buyer side. These remarks can be defended by the liquidations which until now have been mainly on the long side during drops in the price of the token. Thus, this phenomenon reflects a possible excessive bullish conviction on the part of traders at these levels and therefore suggests a possible future capitulation of buyers if this continues. On this subject, although worrying, this could represent an opportunity for contrarian investors.
According to the XRP Liquidation Heat Map, the decline at the beginning of the month took its price towards a significant liquidation zone, highlighted in the analysis for November 16, 2023. The enthusiasm of buyers seemed marked, however, the price seems to want to test this interest. Now, the most significant liquidation zone over the last three months is around $0.65. The price approaching this level could result in a massive triggering of orders, increasing the possibility of a period of heightened volatility on XRP. This area therefore represents a crucial point of interest for investors.
Hypotheses for the price of Ripple (XRP)
If the price of XRP remains above $0.51, we could anticipate a bullish continuation to $0.6 – $0.65. The next resistance to take into account, if the upward movement continues, would be the $0.73 threshold. At this stage, this would represent an increase close to + 43%.
If the price of XRP fails to hold above $0.51, we could envisage a return to $0.47. The next support to take into account, if the bearish movement continues, would be around $0.42 – $0.41. At this stage, this would represent a drop close to -19%.
Conclusion
False jump for XRP. While the cryptocurrency has undergone an increase since its support, it unfortunately did not have sufficient momentum to cross its last peak. Is a new impetus needed to enable it to get there? What is certain is that it will be crucial to carefully observe the price reaction at the different key levels to confirm or refute the current hypotheses. It is also important to remain vigilant against potential “fake outs” and “market squeezes” in each scenario. Finally, let us remember that these analyzes are based solely on technical criteria and that the price of cryptocurrencies can also evolve quickly depending on other more fundamental factors.
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