XRP, the native cryptocurrency of the Ripple network, has experienced a sharp decline of 10% in its price over the course of a week. This unexpected crash has led to concerns about how much further the price could potentially drop.
Upon closer analysis of the charts, it is evident that XRP has broken below its sideways consolidation range, indicating a shift towards a bearish market sentiment. The breach below key support levels, including the 100-day and 200-day moving averages, as well as the $0.57 static support range, further validates the dominance of bearish sentiment.
However, the price has retraced back to the breached level, potentially completing a pullback. If this pullback is confirmed, it could signify a successful breakout and lead to a mid-term downward trend towards the significant support region at $0.48.
Despite this bearish outlook, there remains a small possibility that the recent breakout could turn out to be a false one, with the price retracing back above the breached range. In such a scenario, the market may initiate a fresh surge, aiming for the resistance threshold at $0.7.
A closer examination of the 4-hour chart reveals a breach below a significant support region aligned with the lower boundary of a wedge pattern. This breach indicates the dominance of sellers in the market. However, the impulsive cascade found support at the crucial region of $0.51 and the multi-month ascending trendline, leading to an immediate reversal and a potential pullback towards the breached support region, which now acts as a strong resistance level.
In summary, XRP appears to be currently confined within a significant range, bounded by the resistance region at $0.61 to $0.58 and the crucial support at $0.51. As a result, a mid-term consolidation stage is expected within this range for XRP.