On a tumultuous day for cryptocurrencies, the price of XRP plummeted to a low of $0.38249 on Bitstamp, reflecting a broader downtrend affecting the altcoin market. With a notable decline of 12.4% in the past 24 hours, XRP is facing crucial support. Despite this substantial decline, Dark Defender (@DefendDark), a well-known crypto analyst on X, remains optimistic about the future prospects of XRP.
XRP price should hold $0.39
In his analysis of the 1-month XRP/USD chart, Dark Defender notes specific key levels and indicators. He points out that “XRP reached our last support level of $0.3917 after remaining below $0.4623 for three consecutive candles.” This observation is crucial because it highlights XRP’s resilience at a significant support level: the Point of Control (POC).
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The POC, where Dark Defender indicates ‘Green Dotted Line’ – the price level where most transactions took place since 2014, is $0.3917. This level serves as the focal point for traders’ consensus on value, and has historically provided a strong basis for price. The recent touch of this level suggests a testing ground where bullish sentiments could potentially stabilize and reverse the downtrend.
Dark Defender’s chart also includes Fibonacci retracement levels, which are crucial in identifying potential support and resistance areas based on previous price movements. According to Dark Defender, the $0.4623 level, corresponding to the 38.20% Fibonacci retracement, represents significant resistance. Should XRP break above this threshold, it could pave the way for further gains towards higher Fibonacci levels such as $0.6649 and $1.8815, corresponding to 70.20% and 161.80% retracements, respectively.
Dark Defender highlights the Relative Strength Index (RSI) and states: “XRP daily and weekly RSI are at the bottom and oversold.” This indicates that the asset is potentially undervalued, and such conditions often precede a price recovery. He also compares the current monthly RSI levels to those of the major market bottoms in March 2020 and November 2022, indicating a possible repeat of the recovery patterns observed during those periods.
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The volume profile on the chart underlines the presence of substantial trading activity on and around the POC. This high volume at lower prices indicates robust buying interest, which could cushion further declines and create a strong base of support.
Overall, Dark Defender presents an argument for a potential bullish reversal for XRP. His examination of the support levels, particularly the bounce at $0.3917, combined with the oversold RSI conditions and historically significant trading volume at this price, paints a picture of possible upside momentum.
As the market digests these levels, the ability to hold above $0.3917 will be critical in determining the near-term price trajectory, potentially mirroring the 2014-2017 recovery phases. From March to May 2017, XRP rose by over 6,600%, from less than $0.006 to $0.40.
If history repeats itself, the XRP price could see a massive rally. However, Dark Defender’s closing comment is: “The 2014-2017 pattern is still identical unless the $0.3917 is not protected. I will keep you informed,” underlines the crucial nature of this support level in the ongoing market dynamics.
At the time of writing, XRP was trading at $0.41042.
Featured image created with DALL·E, chart from TradingView.com
