XRP's $0.50 Support Holds Amidst Crypto Market Selloff 4

Quick take:

  • XRP has experienced a correction due to a weakening Bitcoin
  • The remittance coin has also enjoyed a parabolic run that was due for a pullback
  • There are also rumors of the US treasury banning self custody of digital assets
  • XRP’s $0.50 support has held and is crucial in determining its next trajectory

The digital asset of XRP has lost a good amount of its value since posting a two year high of $0.78 – Binance rate – on the 24th of this month. At the time of writing, XRP is trading at $0.53 after experiencing a dip to the $0.47 price area earlier today. The dip to the latter value was a 40% drop from the aforementioned $0.78 peak value.

Why XRP’s Value Dropped

As with all altcoins, the fate of XRP is tied to that of Bitcoin and the King of Crypto also experienced a significant pullback in the last 48 hours. A quick glance at the Bitcoin chart reveals that BTC fell from $19,400 set yesterday, to the $16,300 support area. This is a 16% drop by Bitcoin and one reason XRP fell by 40%.

Secondly, XRP had experienced an impressive parabolic run due to the hype surrounding the Flare Networks snapshot event on the 12th of December. At the start of November, XRP was trading around the $0.24 price area. The remittance coin has thus gained by 3.25x in less than a month due to the Flare Networks snapshot event.

Such an impressive rally is usually accompanied by a pullback that can ultimately erase 80% of the gains as witnessed with Bitcoin in December 2017.

Thirdly, there have been rumors circulating that the US Treasury Secretary is planning regulation that would see crypto owners in the US, banned from storing their own digital assets. They would only be allowed to own digital assets through third parties such as financial institutions. These rumors have rattled the entire crypto market.

XRP’s $0.50 Support Zone Holds

As earlier mentioned, XRP is trading at $0.53 as it has reclaimed the $0.50 price area as support. This area should be a considerable battlezone for bulls as they attempt to keep the snapshot hype alive as we roll into December. To determine the short-term future of XRP, the following daily chart shall be used.

XRP's $0.50 Support Holds Amidst Crypto Market Selloff 3

From the chart, the following can be observed.

  • XRP is clearly in overbought territory judging by its extreme deviation from the three moving averages: 50, 100 and 200 day
  • Trade volume is clearly in the red confirming increased selling
  • The daily MACD is hinting at a pullback with its histograms point towards reduced buying
  • The daily MFI and RSI are high at 86 and 77 confirming that XRP could keep dropping in value
  • If the $0.50 support area is lost, XRP has additional support zones at $0.48, $0.45, $0.42, $0.38, $0.34, $032 and $0.30

Source
Author: John P. Njui

Categories: Altcoins

0