The XRP token has fallen below the critical support line, jeopardizing the entire bullish narrative. Whether to expect further decline in cryptocurrency
The price dynamics and Relative Strength Index (RSI) values on several timeframes confirm a further decline.
Thus, a run-up of bearish dynamics can be considered the most likely scenario for XRP in the short term.
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Despite the lack of decisive news in the Ripple case against the Securities & Exchange Commission (SEC), supporters of the blockchain project cheered the news that the presiding judge in the case rejected a motion filed by the securities regulator.
The court sided with Ripple on the issue, but the case was postponed again, which means that XRP holders will be in limbo for a long time, and Ripple will not be able to get to their reserves and cash them out.
On how the lawsuit against Ripple will affect XRP holders, see BeInCrypto.
XRP exchange rate surrendered important support
XRP has been trading inside an ascending parallel channel since June 2022 year.
The price movement inside this pattern consists of numerous bounces from the resistance and support lines, which eventually end up in a break of one of them.
From technical point of view, the ascending parallel channel is considered as a bearish pattern.
As expected, on March 29 the price rebounded from the channel resistance line, which created the catalyst for the downside movement.
XRP then fell below the $0.53 horizontal area, and formed a declining high (red icon).
Breaking below the middle channel line (red circle) confirmed the bearish pattern. Since then, XRP has fallen to the channel support line.
Furthermore, the Relative Strength Index (RSI) is giving bearish signals. Traders use RSI to judge if the market is overbought or oversold.
If the RSI is above 50 trending upward, the market remains bullish.
If RSI is above 50 and the trend is uptrending, the market keeps a bullish momentum, when the index falls below 50, we can say that the market is bearish.
XRP Price Forecast: How Long Will the Bounce Last
Technical analysis on the short-term four-hour timeframe shows that despite the rebound, the price will continue to fall in the near term.
The main bearish signal is given by the wave analysis based on Elliott theory. It helps to determine the trend direction by analyzing recurring long-term price patterns.
The wave structure indicates that the fifth downtrend wave ended and the bounce started.. However, given the previous decline, we can assume that it is part of a corrective rally.
The most probable target for the correction is between the Fibonacci levels of 0.5-0.618 ($0.50-$0.52). From here, the price may resume its decline.
A drop of XRP below the fifth wave low at $0.41 would mean that the trend is still bearish. In that case, the most likely scenario is a decline to the channel support at $0.36.