XRP, the cryptocurrency that has experienced a significant decline of 85% from its all-time high, may still have a chance for recovery, according to market data analyzed by Northstar, a market analyst. XRP reached its peak of over $3 in January 2018 after a remarkable surge from its low of $0.005 in February 2017.
However, since then, XRP has seen a massive drop to around $0.48 at the time of Northstar’s analysis, leading to speculation about its future trajectory. Despite this decline, market data suggests that there is still a possibility of a rebound.
On the two-week chart, Northstar identified a long-term symmetrical triangle that demonstrates XRP’s struggle since its peak. The chart reveals several failed attempts to break above the triangle’s resistance, resulting in a breakdown below the support line at around $0.55. This breakdown is significant as it indicates an increase in bearish momentum, potentially leading to a further decline of nearly 40% to around $0.30 if the selloff continues.
On the weekly chart, a smaller symmetrical triangle pattern formed after a drop from $0.93 in July. XRP recently broke out of this pattern, reaching resistance at the middle Bollinger Band around $0.65. However, the recent market drop caused XRP to retest the upper trendline, now acting as support around $0.48. It is crucial for XRP to defend this support to avoid a drop back into the symmetrical triangle.
The Stochastic Momentum Index (SMI) indicates a downward trajectory, suggesting weakened buying pressure. If XRP fails to reclaim the $0.52 resistance, the next support levels to watch are the $0.4270 level marked by the lower Bollinger Band. A breach below this support could result in XRP targeting $0.30, in line with the descending triangle’s measured move.
Santiment’s data shows a relationship between price volatility, active addresses, and XRP’s price. XRP experiences significant price movements during periods of increased volatility and active addresses. Currently, active addresses hover around 25.9K, while volatility remains moderate. This suggests the potential for upcoming price swings if volatility increases with active addresses.
Considering the current technical setup, XRP may face a challenging path ahead. The breakdown of the six-year symmetrical triangle on the two-week chart and the retest of the one-year symmetrical triangle on the one-week chart indicate bearish continuation or potential consolidation. Key levels to monitor include the $0.52 resistance and the $0.40 support. Failure to hold these levels could validate the bearish targets, with $0.30 being a critical risk for the downturn.
However, there is a possibility for a shift in momentum. If volatility and active addresses increase, as indicated by Santiment’s data, XRP could experience significant price swings. In such a scenario, reclaiming the $0.52 level could negate some bearish sentiment and potentially lead to higher resistance levels around $0.60 and $0.70.