XRP, the fifth-largest cryptocurrency in the market, has entered a phase of macro consolidation after a significant decline that began on July 20. This consolidation has kept the token’s price in a range of $0.4858 and $0.5505 ahead of Ripple Labs’ legal victory against the US Securities and Exchange Commission on July 13.
XRP consolidation continues despite strong trading activity
According to Based on insights from crypto market data provider Kaiko, XRP showed extreme trading volume during the summer. XRP’s average trading volume in the previous month was $462 million, four times higher than the next most prominent altcoins in terms of trading volume.
The question arises why XRP failed to maintain its price gains despite its impressive trading volume.
Analyzing the average share of sales volume for XRP yields some insights. In particular, the largest Korean exchange, Upbit and OKX experienced significant selling pressure, while buying activity has been more prominent on US Coinbase over the past month.
Another interesting observation is the increase in average trade size for XRP on Coinbase, which is outpacing all other top ten altcoins.
This suggests that buying demand may have been driven by major traders in the United States, as investors regained access to the token following the July court ruling.
However, it is essential to note that while XRP tops the list in the offshore markets, its share of trading volume in the United States remains lower, ranking it as the 6th most traded altcoin by cumulative trading volume.
Currently, XRP is trading at USD 0.5063, showing a stable price within 24 hours. Additionally, the token has been on a consistent consolidation phase, dropping slightly by 2.7% and 1.4% over the past seven and 14 days, respectively.
This raises the question of whether XRP’s uptrend will gain the upper hand or whether further downward moves are looming.
Is a bullish rebound or downtrend imminent?
Crypto analyst Egrag Crypto recently featured the social media platform X (formerly known as Twitter). two contrasting scenarios for the price movement of XRP.
The first scenario suggested a potential dip to $0.43 or even $0.35, which could be seen as a shakeout before a recovery. The second scenario presented a more optimistic outlook, with XRP potentially aiming for highs of USD 0.60 and USD 0.67 before rocketing to new levels.
To better understand the likelihood of these scenarios, it is critical to examine XRP’s resistance and support lines on the daily chart above.
The chart shows that while XRP surpasses the next resistance level of USD 0.5401 and regains bullish momentum, it could potentially experience a substantial 27% uptrend towards USD 0.6700, as predicted by Egrag Crypto. However, the token currently faces two major hurdles in achieving this.
XRP’s 200- and 50-day moving averages (MAs) can act as solid resistance levels if the token’s trading volume is not accompanied by enough buying pressure. Currently, XRP is trading below these two lines, adding to the challenge of overcoming the resistance.
If XRP fails to overcome these resistances and sustain the consolidation phase, another correction for the token may soon be on the horizon.
On the other hand, bullish investors will need to defend the closest support floor for XRP at USD 0.4524. If this level is breached, the token could drop further to the $0.3495 zone or even the $0.2854 line, representing XRP’s one-year support.
Given the different scenarios and the resistance and support lines depicted in the chart, the absence of catalysts that could propel XRP into higher price areas, coupled with a failed attempt to maintain its macro consolidation zone, could cause XRP to continue its downtrend. continues and may have reached its downtrend. a new annual low.
Featured image from iStock, chart from TradingView.com