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XRP crashed to $0.7 level; here’s where buyers can step in

Warning: The conclusions of the following analysis are the sole opinions of the author and should not be taken as investment advice.

On the daily time frame, XRP looked strongly bearish. The $0.77 area was where a support level was and some demand was expected to come. Some demand was seen, but nowhere near close enough to stop the mounting selling pressure.

The next area of ​​demand lay at $0.51. Could XRP see a rebound from this zone?

Source: XRP/USDT on TradingView

XRP’s move from the $1.34 high to the $0.6 low in December was used to plot a set of Fibonacci retracement levels (white). The price rebounded from this zone in December to $1, but was rejected.

A retest of the $0.77 demand zone saw price slide below and swing it into a supply zone. Since then, January has seen steady losses. The market structure remained bearish.

The 27% extension level, based on the aforementioned set of Fibonacci levels, was $0.39. This level represents an area where a move below $0.6 (100% of the previous move) can find relief. However, the $0.51 area saw a bullish order block form in July earlier in 2021. A similar bullish reaction could play out again. However, the trend would remain bearish.

The price fell below a channel (yellow) whose midpoint also acted as resistance in December. The lows of this channel could act as supply, which means that the $0.64-$0.7 area could be a supply zone in the coming weeks.

Reasoning

Source: XRP/USDT on TradingView

The daily RSI has remained above 30 for most of the past six to seven months, with brief dips. The most recent selloff for XRP fell as low as 23.1 and retested 30 as resistance. A relief recovery can be expected, but it does not have to be a sustained recovery.

Even though the price was at $0.6, the Stochastic RSI was climbing once again. The indicator seemed to be gathering steam for another drop.

The OBV has been on a downtrend since September, in line with the price action.

Conclusion

The trend and structure of the XRP market was decidedly bearish. A support level of $0.51 can act as a demand domain, while the $0.64-0.7 domain could be retested as a supply domain. A move back above $0.7 and $0.77 would be needed to break the bearish pattern.

Margarita W. Wilson

The author Margarita W. Wilson