Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- XRP was in a retracement after the mid-July rally, but the drop below $0.566 meant that the downtrend could extend in the short term.
- The Fibonacci retracement and extension levels were important in understanding where the XRP bulls could take a stand next.
On August 17, Thursday, Bitcoin [BTC] fell 12.5% in a day and reached $25.1k on Binance. This violent selloff caused many altcoin holders to destroy their holdings in a blind panic. Many assets, including XRP, saw double-digit percentage losses on that day.
Read XRP’s 2023-24 Price Forecast
Recovery was not yet in sight for the crypto market at this time. Yes, BTC was on top of a higher time frame support zone. But for XRP, the downtrend was strong and the bulls failed to defend the $0.56 level. It seemed very likely that further losses would follow.
The downtrend saw XRP bears smash the $0.55 support zone, can the buyers reclaim it?
Source: XRP/USDT on TradingView
The 6 hour chart highlighted the $0.55 zone as a former bullish order block of the H12 chart. XRP prices crashed below this zone on August 17, turning it into a bearish breaker block. The RSI fell to 9.38 on the H6 chart and stood at 28.4 at the time of writing. This indicated intense bearish momentum.
The OBV also showed a strong downward trend last week. The market structure was bearish on both the daily chart and the 6-hour chart. The fact that the 78.6% level was breached so quickly suggested that sellers clearly had the upper hand and more losses were likely.
Therefore, a jump to the $0.56 level could happen in the coming days, which would likely be followed by rejection. A fair value gap of $0.516-$0.57 could attract XRP as the price is attracted by liquidity before another downward move.
In the South, the extension level of 23.6% at $0.353 was a support level XRP was likely to fall to. However, it may take several weeks for this to become a reality. The $0.5 zone was psychological support and it may take some time for the bears to break through this area.
The negative coverage rate is climbing back into positive territory
Source: Coin analysis
During the price drop late on August 17, the Open Interest and spot CVD noted a steep drop to the south. The funding ratio also fluctuated negatively as short positions dominated the market.
How much is 1, 10 or 100 XRP worth today?
XRP managed to claim the $0.48-$0.5 zone as support over the past two days, and the funding rate started moving towards 0 and was slightly positive over the past two days.
The spot CVD has also climbed higher, showing that buyers were brave enough to bid for the asset after the quick losses. Open Interest did not jump any higher, showing that speculators were less convinced than spot buyers.