XRP Plunges Below $2 as Retirement Fund Interest Fails to Stem Decline
Market Structure Shifts Lower
- 9.2% decline in the past week amid limited feedback in the SEC vs. Ripple case
- $1.12 billion capital inflow via XRP exchange-traded products, marking a fifth consecutive week
- XRP shedding over 5% today, trading at $1.83
Ripple’s XRP saw a 9.2% decline in the past week as its price action limited new feedback in the SEC vs. Ripple case, while a $1.12 billion inflow of capital via XRP exchange-traded products (ETPs) marked its fifth consecutive week. This week’s reversal lower was driven by an inability to gain a positive performance-driven feedback in the ongoing lawsuit despite the fact that multiple exchanges listed additional ETPs. ETP flows are likely to have a dampened influence on the litigation as blockchain settlement times are not instantaneous. XRP is shedding over 5% today alone at $1.83.
XRP continued to put in a solid performance, racking up almost 290% in YTD gains. However, multiple technical damage indicators like the lower highs on the daily chart, combined with a major moving average breakdown after the 50-day dropped below the 200-day last month are prime ingredients for the active selling pressure. Kneejerk bounces after weeks of falls often see “dead cat” rallies that are followed by new lower lows as deflated bulls reduce exposure at the expense of latecomer or hopium bag-holding longs. Most technical indicators are currently in the bearish zone, although the weekly Relative Strength Index is bordering on oversold levels suggesting short-term relief could be on the cards.
| Metric | Value |
|---|---|
| Asset | XRP (XRP) |
| Current Price | $1.86 |
| Weekly Performance | -3.57% |
| Monthly Performance | -9.21% |
| RSI (Relative Strength Index) | 37.9 |
| ADX (Average Directional Index) | 24.6 |
| MACD (MACD Level) | -0.07 |
| CCI (Commodity Channel Index, 20-period) | -101.15 |
RSI Drops to 44.88 – First Sub-50 Reading Since November Correction
With the MACD almost straight-lining to 0.03, researchers believe risk-off sentiment will continue through the remainder of the month as the MACD nears a death cross. Combination oscillator + MAs are often the preferred setup for top Wall Street equity funds, adding weight to bereft XRP bulls facing daunting odds. MACD–RSI–Stochastics stochastic sequential projects January 22’s $0.288 low will be taken out at latest on January 4 for Quadrant 3 pressuring losses to eclipse $0.225 elongation flush 12 December.
Comparable RSI settings in late April led to a 50% drawdown as the RSI reached 30 during the first week of May. In this context, swing traders should be cautious as we are currently sitting at 45. This means we still have room for another 15-point dip before we reach oversold levels (30) where larger time-frame counter-trend bounces are likely to occur.
The weekly RSI is also losing steam and is currently at 44, confirming that bulls on the higher time-framing horizon are losing momentum despite all the great news regarding institutional interest.
ADX at 24.6 Signals Trend Acceleration From December’s Sideways Grind
When assessing trend strength, the ADX measure of 24.6 indicates that we are no longer in the choppy consolidation of late December. That favored day traders playing ping-pong between $2.20 and $2.50 but in a more advantageous situation for trend followers. We are in a place where ADX acceleration is directly correlated to XRP breaking downside through a cluster of technical levels, which has now led to the conviction of the seller.
In other words, the ADX reading shows that we are at a good level to see directional movement – where it’s strong enough to keep heading that way, but not high enough to be overbought/oversold above 40. The last time this pattern emerged was during the November decline when XRP dropped 35% after ADX moved above 25. So, prepare your position trading systems for a possible multi-week downtrend as -DI leads the charge at 25.1, compared to +DI at 12.3.
Price Trapped Below Entire EMA Ribbon After Losing $2.11 Support
The 10-day EMA has slid beneath the 20-day EMA, with the 20-day EMA oversold in relation to the longer-term 50-day EMA, which can sometimes indicate a transition from consolidation to downtrend. This would likely accelerate if the current retest of the previous consolidation support at $1.80 fails to produce a sufficient bounce for re-entry. The VPVR shows minor support at this level, with the single visible LVN below sitting at $1.50.
The EMA ribbons have also twisted bearishly and look to be curling down, suggesting further downside punishment for miners this month at least. Miners are failing to benefit from any post-ETF euphoria, even if it was misplaced as the ETF isn’t even happening! This is akin to September’s non-move in gold post-Fed. Normal markets would have moved to take out weak longs expecting to ride an ETF pop, but that hasn’t occurred here.
Monthly Pivot at $2.19 Anchors Massive Resistance Zone
There are strong resistance levels above the current price point, ranging from $2.19 to $2.55. The monthly pivot point at $2.19 lines up with the 50-week EMA, acting as a dual resistance wall that blocked attempts to break through since the holidays. The December high of around $2.90 set the annual peak, which is now out of reach considering the current technical condition. However, not even the billion-dollar ETF inflows could break the price through those resistance points, indicative of the fact that even institutional interest won’t be enough to break technical resistance.
Bulls are trying to defend several support levels underneath, yet all are beginning to weaken. The first line of defense is at $1.86, which is current levels, as the monthly S1 pivot acts as a short-term prop. Below that sits the psychological $1.80 level, along with November’s rebound zone, which is essential in preserving any bullish framework. The monthly S2 pivot of $1.43 is in the vicinity of the 200-day EMA of $1.32, and would likely be the target of ultimate despair if panic liquidation increases.
The price action is compressed between the trendline and the psychological level of $2, with the intraday reaction at support points oscillating around $1.86 citing the November and monthly low. This level’s breach should trigger the downside breakout, opening the gate for stop-loss hunting and panic selling. The coming supply zone would range $1.70 – $1.75 with smart money orders accumulating near the key $1.60.
Bulls Need Daily Close Above $2.11 to Avoid Deeper Correction
If the price could rise above the 50-day EMA, which is currently at $2.11, and if it could do so with conviction, meaning algorithmic retirement strategies could net be buyers on a weekly closing basis, then you would see them target the monthly pivot resistance, which is $2.19 before. With resistance levels now lay horizontal right here below the market and the pivot, and falling resistance, both falling right at $2.15.
The scenario could be invalidated by swift recovery through $1.92 resistance. At first glance, XRP is holding the optimal line and the RSI is within neutral levels. 10-day volume weighted average price stands at approximately $1.95. Notice that after a distinct break of the $24m+ indicator earlier this week, new whales have not emerged.
Although it has been able to maintain elevated fund flows, Ripple’s (CCC: XRP-USD) price action continues to gradually erode on the charts. A declining pattern of lower highs and lower lows has emerged as ongoing 10-, 20-, and 50-day moving average weakness helps keep the technical pressure on. Back in April, XRP couldn’t sustain any price momentum above the $1 level, which also likely defines the next major line in the sand. Beyond that, further cover potential remains at $1.20, with a series of prior consolidation levels between $1.40 and $1.60 acting as interim resistance.
