- Ripple risks a massive breakdown to $0.28 due to the formation of a symmetrical triangle pattern.
- XRP’s network growth has dropped by 65.9% as token intake reduces across its markets.
- In the event the price breaks above the upper trendline, XRP could soar to $0.5.
Ripple embarked on a wild rollercoaster ride this week, soaring to highs above $0.75 for the first time in 2021. However, as reported, the token was dumped massively shortly after the exciting upswing. XRP seems to have secured a pit stop support at $0.35, but the technical outlook suggests that XRP may be in for another 25% trip downhill.
XRP to lose another listing as PrimeXBT cites liquidity challenges
XRP has been a ‘train wreck’ since the US Securities and Exchange Commission (SEC) filed a lawsuit against the issuing company Ripple Labs Inc. and its top officials. The regulator claims that Ripple sold unregistered tokens to investors.
Multiple exchanges, including Coinbase, resulted in delisting XRP, citing regulatory compliance issues. However, PrimeXBT says that there have been “significant events surrounding Ripple” and a lack of support from its liquidity providers.
As of “Wednesday, February 10, 2021, at 15:00 (UTC),” the XRP/USD and XRP/BTC will cease trading on the platform. A “reduce only” status will be utilized ahead of the removal until 15:00 UTC on Wednesday.
Ripple recovery faces significant resistance
The 4-hour chart shows XRP trading within a narrow range between $0.35 and $0.4. Selling orders are poised to surge, especially if XRP closes the day above the range limit. On the downside, support at the 50 Simple Moving Average ($0.35) must stay put to avert potential losses toward $0.3.
The Moving Average Convergence Divergence has validated the pessimistic outlook. The MACD line (blue) recently crossed beneath the signal line, hinting that the breakdown is far from over. Until the MACD reverses the trend, crossing above the signal line, XRP’s upward movement will remain capped.
Simultaneously, the Relative Strength Index brings to light a dominating sideways trading action, as it levels at the midline. The motion under the average level will call for more sell orders.
XRP/USD 4-hour chart
Similarly, short-term analysis suggests that Ripple is getting closer to a 25% downswing, eyeing $0.28. The formation of a symmetrical triangle pattern hints at a break from the prevailing consolidation. This pattern is created by drawing a descending trendline to connect a series of lower highs. At the same time, the asset’s higher lows are connected using an ascending trendline.
Price action from the pattern can either be a breakout or a breakdown. A breakout occurs when the price crosses above the upper trendline. On the other hand, a breakdown happens when the price hits levels under the lower trendline. Both the breakout and the breakdown have an exact target measured from the triangle’s highest to lowest points.
XRP/USD 30-mins chart
The pessimistic outlook can be reinforced by Santiment’s network growth on-chain metric, which measures the number of new addresses joining the XRP protocol daily. The metric topped out on February 1 at approximately 12,600 addresses but has dropped sharply in just two days to roughly 4,300, representing a 65.9% decline.
The massive drop suggests less uptake of XRP in the market, primarily due to the price drop. If the network growth fails to recover, XRP could continue to drop in value toward $0.28. Low network growth is also a bearish signal for the mainstream adoption of the project.
Ripple Network growth
Looking at the other side of the picture
XRP could also ignore the downswing and instead rally 25% toward $0.5. As mentioned, a break above the symmetrical upper trendline may result in upward price action. Moreover, a daily close of $0.4 could call for ore buy orders, creating enough volume to support the uptrend.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.