The XRP price is trading at $0.5916 as of 2:30 am EST, up 2% over the last 24 hours.
Data from TradingView shows that XRP fell from an opening at $0.5934 on April 5 dropping by 3% to an intra-day low of $0.5776 a day after Ripple Labs announced plans to release a multi-chain USD-backed stablecoin.
Ripple, the company behind the cross-border remittance token, seeks a share of the $150 billion market by issuing a stablecoin pegged 1:1 to the U.S. dollar.
The crypto firm announced this on April 4, saying that the stablecoin will first be released on the XRP Ledger and the Ethereum network in 2024.
Ripple says that the "move extends the firm's reach into both institutional and DeFi realms, diversifying use cases."
The blockchain company plans to do this by diversifying its payment infrastructure with the aim of bringing the "worlds of traditional and decentralized finance closer together."
The international payments firm acknowledges that the future of crypto is multichain, and a stablecoin needs interoperability to achieve mainstream adoption.
While the announcement brings positive news from the firm, Ripple is still battling the U.S. Securities and Exchange Commission (SEC) in court. As such, the stablecoin news failed to catalyze gains in XRPLedger's native token XRP.
The XRP price has formed a head and shoulders (H&S) technical formation on the daily chart (see below). This is a highly bearish technical chart that points to the continuation of a downtrend.
The price of the cross-border payments token has been on a decline since turning away from its 2024 high of $0.7440 (head) on March 11. The altcoin has failed to make a comeback to the local top despite numerous attempts, and XRP has been range bound between the Feb. 17 low of $0.5643 and March 18 high of $0.6686 for nearly a month and a half, completing the right shoulder of the chart.
A daily candlestick close below the neckline of the governing chart pattern at $0.5816 would see the XRP price sweep liquidity at the daily support level, $0.5386. This level has acted as support since Feb. 15 and has held strong through multiple retests.
In highly desperate cases, XRP may drop below the psychological level of $0.50 toward the pessimistic target of the H&S pattern at $0.4568, which would represent a 21% drop from the current price.
TradingView Chart: XRP/USD
This negative outlook was supported by the downtrend displayed by the relative strength index. The price strength at 43 suggested that the market conditions still favored the downside.
On the other hand, XRP could bounce off the neckline at $0.5548, initiating a recovery toward $0.60. A daily candlestick close above this level could propel the price toward the March 11 peak of $0.7440, invalidating the bearish thesis.
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