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Ripple’s XRP token is down more than 30 percent today, as losses are seen across the top 15 cryptocurrencies.
Having rallied more than 35,000 percent last year, the price of XRP rose to lifetime high of $3.85 on Jan. 4. However, the bull run faded in subsequent days. Over the weekend, XRP traded in a sideways manner above $3.00, before falling below the psychological level earlier today.
At time of writing, the world’s third-largest cryptocurrency by market capitalization is trading at $2.34 levels.
The decline comes alongside declines across the top 15 cryptocurrencies today. Other top losers are bitcoin cash (-17.5 percent), litecoin (-12.9 percent), cardano (-8.68 percent), NEM (-8 percent) and stellar (7 percent).
The 30 percent decline in XRP seen in the last 24 hours perhaps contradicts the overall optimism in the market about the cryptocurrency’s future. For instance, market experts have pointed out that XRP could achieve a larger market cap than bitcoin if prices rise over $6.80. Further, Pugilist Ventures believes Ripple’s long-term fundamentals may become attractive if XRP continues the meteoric rise this year.
Moreover, many investors are keen on XRP since its creator is working with major institutions to facilitate cross-border transactions.
While long-run fundamentals may look positive, though, the short-term technicals look bearish.
The above chart (prices as per Bitstamp) shows:
- A short-term top is in place at $3.3170 (Jan. 4 high) as indicated by the bearish doji reversal (Thursday’s doji candle and a bearish follow-through on Friday).
- A sharp drop from $2.78 (intraday high) to $2.45 adds credence to the bearish doji reversal.
- The relative strength index (RSI) is moving lower from the overbought territory (above 70.00), indicating the potential for a deeper pullback in XRP.
The above chart shows XRP failed to capitalize on the sharp recovery from the Jan. 5 low of $2.15 and breached the rising trend line support earlier today.
Further, the RSI has dropped into bearish territory.
- XRP looks set to extend the decline to $2.14 (38.2 percent Fibonacci retracement). A violation there would expose $1.778 (50 percent Fibonacci retracement).
- On the higher side, only a close (as per UTC) above the intraday high of $2.78 would open doors for a re-test of $3.3170 (last week’s high).
Parascending image via Shutterstock
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.