As the financial world continues to reel from the recent cryptocurrency fluctuations, the question on everyone’s lips is, will 2022 provide a safe haven for XRP bulls? In the past month, we’ve seen XRP, a digital currency that operates on the Ripple network, tumble by over 35%. This plunge has put its July gains at risk, with the Open Interest rates taking a dip as the sellers begin to dominate the market.
Mid-Year Turbulence for XRP
Earlier in the year, XRP was riding high, enjoying a substantial pump following Ripple’s partial legal victory against the SEC. This pump saw it net a gain of over 70%, reaching a high of $0.94. However, since mid-July, the bearish trend has taken hold, threatening to wipe out these gains. This trend has continued into August, with the rest of the gains on the verge of being wiped out.
Crucial 2022 Support Zone
The recent drop has brought XRP to a pivotal support zone, which was established in 2022. This zone, between $0.5600 – $0.6575, served as a support area from July to December 2022, and was a weekly bullish order block during this period. However, it turned into resistance in Q2 2023, only to be overcome in Q3.
Currently, XRP has fallen back to this zone, with a decrease of over 35% following a price rejection at $0.94. The question now is whether this 2022 support zone will encourage sellers to withdraw from the market, and potentially halt the drop. If the zone is retested as support, a rebound towards $0.90 could be possible. However, if Bitcoin [BTC] loses its grip on $28k and drops further, sellers might push XRP down to $0.41 or even $0.30.
Market Control Shifting to Sellers
The RSI has remained above the median mark since April, indicating that buying pressure has been moderate since Q2. However, the Chaikin Money Flow (CMF) has slipped below zero, highlighting capital outflows in recent days.
Between 15-16 August, the CVD (Cumulative Volume Delta) of XRP took a downward turn, indicating a shift in market control towards the sellers. The sharp drop in Open Interest (OI) rates from >$680 million to around $580 million further reinforced this bearish trend.
While a slight improvement has been noted at the time of writing, the OI and CVD have not yet shown signs of a price reversal. Therefore, keeping an eye on BTC’s movement is critical before making any decisions. To help with this, tools like cryptoview.io can provide valuable insights into the market trends.
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