Ripple Price Analysis: XRP/USD Downside Risks Intensify as a Hole is Pierced in Major Support Area
- Ripple price was under heavy pressure on Thursday, due to a chunky crypto-market wide sell-off.
- XRP/USD bears have applied further pressure to break down a key demand area.
Ripple Price Pressure
The Ripple price came under heavy selling pressure on Thursday, due to a bloodbath being observed across the crypto market. XRP/USD is seen down over 10% in the early part of the session. A domino type effect has taken place following a Bitcoin sell-off, which was triggered during Asian hours. Volume spiked to its highest seen since the falling market on 6th September.
It is unclear as to whether there was any particular fundamental catalyst behind the plunge in prices. However, several news wires are pinning the move on a development from earlier in the week, commentary from the IMF, 2 days ago. They appear to just be looking for a fundamental reason for the moves, which is not always the case, as with any market. In terms of the previous story, The International Monetary Fund warned the “rapid growth” of bitcoin and cryptocurrency assets could create “new vulnerabilities in the international financial system.” They further added “Cybersecurity breaches and cyberattacks on critical financial infrastructure represent an additional source of risk because they could undermine cross-border payment systems and disrupt the flow of goods and services.”
Aside from the IMF commentary, it isn’t uncommon that the market observes such aggressive spikes. These types of moves have been observed time and time again. It isn’t uncommon to have such attributed to big money Bitcoin players, often referred to as ‘whales’ to have caused such price action. Furthermore, worth considering that large stops could have been triggered to the downside, from bots or algorithms.
Technical Review – 60-minute Chart
XRP/USD via the 60-minute chart view, has consequently smashed through a vital near-term area of support. The demand zone was seen tracking from $0.4500-0.4200 area. This comes after the price fell through $0.4700 support. It had been holding and providing some comfort for the past 4 trading sessions. Given the number of times bears tested this over the last few days, it isn’t too surprising that the break has now been observed. Near-term support will likely be sought at the $0.4000 mark. Resistance could likely be seen at the former strong demand area, as mentioned, from the range of $0.4500-0.4200.
Technical Review – Daily Chart
Looking at the daily view, the piercing of this crucial demand zone, could be catastrophic. Previously back on 6th August, XRP/USD bears made a push and daily close below. This went on to see a fall of over 40%, down to a low sub-$0.2500 mark. Outside of the near-term support at the $0.4000 level, should it not hold, next major buying may not kick back in until the $0.2500 territory. In terms of challenges for the bulls, these will now be to break down the barriers running from $0.4200 up to $0.4700 again.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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