XRP Tests Critical Support at $1.84 as Exchange Supply Hits 7-Year Low
Supply Shock Signals Building
- The amount of XRP held by exchanges has dropped to the lowest level in 8 years. When this happens, it historically signals a major rally is about to happen.
- Major banks in Japan have accelerated their adoption of the XRP Ledger. XRP is expanding its use among institutions in Asia.
- The price of XRP is consolidating around $1.84. It lost 14.5% in a week. The good news is that momentum indicators have reset.
The recent price action of XRP comes down to a technical battle between historic levels of scarcity and holders’ unwillingness to sell, against a clearly weak chart structure which above all, lacks high enough levels of liquidity.价格动向说明了两股力量的较量——毁灭性的技术性疲软遭遇史无前例的供应动力学。在过去一周中，亚币暴跌 14.5%，至 1.84 美元，抹去了先前曾有的上涨。然而交易所供应储备却降至2016 年以来的最低水平。随着日本主要银行现主动部署 XRP 分类帐，和中心化交易所持仓导致供应短缺，市场技术上呈现出弹簧的形态。对交易员的主要问题：是基本稀缺可以战胜技术性卖压，还是空头会突破支撑位 供应吃紧之前就生效了？
| Metric | Value |
|---|---|
| Asset | XRP (XRP) |
| Current Price | $1.84 |
| Weekly Performance | -1.56% |
| Monthly Performance | -14.45% |
| RSI (Relative Strength Index) | 39.5 |
| ADX (Average Directional Index) | 25.2 |
| MACD (MACD Level) | -0.06 |
| CCI (Commodity Channel Index, 20-period) | -70.07 |
RSI Drops to 39.51 – First Oversold Signal Since October’s Rally Base
The price exploded following similar technical conditions last month. On December 29th, the Relative Strength Index, or RSI, printed an identical sub-40 read on the daily timeframe. Pretty much the same setup occurred in early September just before a 190% advancement over the following three weeks. The embedded 8-day cycle oscillators look prime for earnings over the coming days with a break back above $1.22.
Therefore, all in all, Bitcoin is not yet ready for a back-the-truck-up long-term swing trade. But it is so close I can smell it if the US banking backdrop continues to improve. The last two weeks have retraced some 80% of that Summer rally yet the trendline (orange) is still very much intact. A weekly close above $46k will get the Bullship back on track eyeing a Q4 ripper back towards old highs. Tight stops, mark.
Weak ADX at 25.17 Signals Choppy Transition From Downtrend
The strength of the trend is quite low as ADX comes out at 25.17 and it is only just above the level where trending conditions would be used to define range-bound conditions in the market. It puts XRP in a bit of a vacuum as it is not strongly trending nor is it cleanly ranging. The drop from $2.22 to where the cryptocurrency is currently trading was made on relatively weak momentum, meaning that sellers have not exactly grabbed the bull by the horns seeing as it was a sharp percentage move to the downside.
In simple terms, there’s no real momentum as yet to drive a consistent move in any one direction. This biases the week towards more choppiness rather than running moves above or below the recent range. And with trend strength and momentum been weak and oscillators pointed lower, the potential for large intraday reversals is higher, especially on a whim or unexpected news event.
50-Day EMA at $2.05 Becomes First Major Resistance After Support Flip
The Relative Strength Index (RSI) continues to hover at oversold, and the historically bearish Williams %R indicator is retesting those extreme lows. Longer-term Fear and Greed and Money Flow Index metrics are the most depressed in years. This suggests a capitulatory flush has driven many holders of Ripple out of the market. Such an event often offers a low-risk window to accumulate the beaten-down asset.
Even more Bulas itching for a bullish breakout have given up hope that the weekly equilibrium pattern near $2 would firmly break in their favor. They’ve set stops, and most of them are already out on unfortunates w/ weeklies. Join them tomorrow next week so we finally get back above the 20 ema. 💩😠🥊🚿💥🕍🎈💪💭😎💩😜😲🕶️🐠😱⚰️🐀🥱🎅🐚👍🐇👦🐀🍳✝️🇺🇦3️⃣惡心‼️🍀🍝🎄🎊😕✅🌟🔱🌓🌃🗂️🔬🦷🏞️😀🍧😷💣😊
Exchange Supply Crunch Meets Technical Support at $1.79-$1.84 Zone
There is strong immediate support in the $1.79-$1.84 area where the monthly pivot middle point meets the psychological level. It has already been tested twice this week with both tests spiking up quite high in volume as buyers stepped in to defend. This level has also gained in importance with XRP exchange reserves dropping to levels not seen in 7 years. This creates additional organic buying pressure as users continue to withdraw coins.
Significant resistance continues to congregate between the 20-day EMA at $1.91 and the late breakdown level at $2.05, a region that bears clearly defend as evidenced by XRP’s recovery attempts being turned back on three occasions over the past five days. Should bulls pass this early test, the monthly R1 pivot at $2.19 is the next major barrier, which neatly coincides with the December consolidation highs.
The market structure still looks bearish in the short term, despite those bright spots. But with the supply shock in the early stages of development, that bearish bias could soon become a tailwind. In similar past instances, price has usually bounced sharply to the upside when it’s come into contact with important technical and psychological support levels, just like right now. With extreme records of exchange whale holdings occurring, the kind of foundation that can even absorb bullish news and shakeout waterfall selloffs is being set.
Bulls Require Decisive Close Above $1.91 to Shift Momentum
Buyers need to overwhelm sellers to show conviction with a reclaim and defense of $1.91. Conviction is precisely what the market was missing when it broke below the 20-day EMA.
If the support at $1.79 is broken, it is expected that this will further push down the positions to $1.65, where the monthly S1 pivot point is located. In case the psychological level of $1.80 is lost just after a few successful attempts to defend it, recent dip buyers will be stuck, following an increase in the sell orders. If $1.79 is lost, the 100-day moving average, located around $1.65, is practically where the price is heading next.
Considering the oversold bounce potential, historic exchange reserves, and increasing institutional demand out of Japan, our updated forecast anticipates XRP consolidating in the range of $1.79-$1.91. This basing process could provide sufficient time for oscillators to unwind before breaking out to retest the post-2018 highs.
