- The price of XRP has been losing ground since Christmas, already at 33%.
- Price action is seeing higher buying volume as a floor has been established around $0.31.
- With the bulls starting to bounce off the lows, it looks like deflation will unfold with a potential break lower in the coming days.
Ripple (XRP) has been in a downtrend since Christmas and has alarmed investors at the beginning of 2022. The sell-off, sparked by concerns about rising interest rates in the US, has formed a strong downtrend, highlighted by the red downtrend line, and supported by the mean cross The 55-day SMA is below the 200-day SMA.. Bulls can turn tables in the coming days, though, as they are rising (green trend line) and pushing up the red ascending trend line. A change in market risk sentiment towards risk could trigger a breakout and return towards $0.78.
XRP will start rebounding as soon as market sentiment turns to risk
XRP price suffered a massive sell-off that pushed stars away from favoring any bullish reaction. The most significant weight comes from the downtrend since Christmas, marked by the red downtrend line. The 55 day simple moving average cross below the 200 day simple moving average is called the death cross which will keep big investors out of trading due to how low it is..
The floor appears to be shaping up, with the bottoms slowly rising to form a floor from January 5th, and the brave bulls have some incentive to start entering now into an extended position. The Relative Strength Index (RSI) is hovering near the oversold territory but starting in a flat line, indicating that buyers have a good chance of entering as more short sellers refrain from entering the market at the moment, as any potential profits are expected to be minimum. Once global markets start to shake off the current turmoil, we expect XRP to see a quick bullish recovery in buying volume which could help it break above the red uptrend line, and move towards the first target at $0.78.
XRP/USD daily chart
XPR is likely to increase buying volume once it reaches $0.78 and rises to the monthly pivot at $0.84. Another continuation could be on the cards if the markets rally and post a few straight days of gains. As it all depends on the global market sentiment, expect a break of the green bullish trend line to push the price further to the downside in search of any support, which cannot be seen until $0.62 or even $0.58 with the green long term support and monthly support level. S1.