The broader decline in the crypto market has seen a bearish shift in XRP prices. This significant drop-off coincided with widespread market instability and economic concerns that affected investor sentiment.
On Sunday, the cryptocurrency markets sharply decreased as investors shifted their money from risky assets. In just 24 hours, Bitcoin dropped by 12.8%, the largest cryptocurrency by market cap, while Ether, the second-largest one, dipped by 21%.
According to CoinMarketCap data, the total value of cryptocurrencies decreased by about $270bn. This drop in the crypto market mirrored an Asia-Pacific equities sell-off, including Japan’s Nikkei 225 Index, which went down as much as 12%.
This continued a losing streak that started last week when the Bank of Japan raised interest rates to their highest level in sixteen years.
XRP has been on a significant low for over twenty-four hours, falling nearly thirteen percent. The price fell from roughly $0.5562 to $0.4545. The graph shows its downward trend, where it closed near its daily low, indicating excessive bearish pressure.
Key levels are high at $0.5562 and low at $0.4545, keeping the price near the lower boundary range-bound.
Also, the volume traded surged by 139.04%, further confirming the continued downtrend strength of this cryptocurrency pair. An increase in volume combined with a price decrease usually indicates strong selling pressure; at the same time, the XRP Market Cap changed by -18.15%.
From the lower highs and lower lows seen on its charting pattern, XRP is trading within a descending channel, which signifies a confirmed downtrend on this pair. Consequently, this channel's upper and lower bounds serve as dynamic resistances/supports, respectively.
Applying the Fibonacci retracement tool between the swing low at around $0.4296 and the swing high slightly above $0.6421 reveals key levels such as a potential resistance zone at 0.00% and a substantial support level at 100.00%.
XRP is currently near the lower boundary of this channel priced around $0.5150 and this level is important because holding that support might imply potential reversal but further declines could invalidate that notion; immediate resistance can be found at the upper line of the channel which when broken will substantiate a bullish case.
The sentiment regarding XRP in the market remains cautious amid a broader bearish backdrop. If Bitcoin stabilizes, pseudonymous trader Cryptoinsightuk argued that Ripple will bounce back better than Bitcoin and according to him; however, there are contrasting views from analysts who believe that once it breaks above prevailing resistance levels XRP may experience a bullish reversal.
Price dynamics for Ripple are still being influenced by general volatility throughout the cryptocurrency markets. The negative sentiment has been driven by economic concerns such as slowing growth in both the US and the global economy. Furthermore, the vagueness associated with inflation management by the Federal Reserve without plunging into a severe recession creates uncertainty.
Nevertheless, calls to remove SEC Chair Gary Gensler have been highlighted, and others think a more crypto-friendly chairperson could boost demand for XRP too. In addition, the ongoing SEC vs Ripple proceeding remains an uncertain point of debate even though Judge Analisa Torres is expected to rule on how much fine Ripple must pay for selling unregistered XRP to institutional investors. Therefore, this decision may affect Ripple’s current position in the market along with its U.S. expansion plans going forward.