Technical Analysis and Market Entry: XRP/USD Could Free-Fall Down to $0.20
- XRP is well within the control of sellers, as the price firmly concedes the psychological $0.3000 mark.
- Price action has smashed out from a bearish pennant structure, leaving the door wide open to further downside pressure.
XRP/USD: Recent Price Behavior
XRP has been under much pressure to the downside; the sellers remain firmly in control and are driving the price deeply south. There is a complete lack of signs for any bullish momentum, which has been the case since June. XRP/USD had dropped well over 40% since 22nd June when the price peaked at $0.5000.
The psychological barrier saw many sellers quickly moving in after the price reached the highest level since November 2018. It was part of a strong recovery that had been observed through the first part of 2019. XRP/USD had climbed as much as 60%, gaining buying interest from $0.2800 at the beginning of the year.
Buying activity had increased in intensity following a breakout above the long-running descending trend line. It had been capping upside potential since September 2018, forcing XRP/USD to print lower highs. There was a promise of a greater recovery for XRP; however, this has now faded given the current push lower.
Critical Pennant Breakout
After its steep fall from late June to mid-July, XRP/USD began to consolidate. The price formed a bearish pennant structure via the daily chart, which was containing committed direction. It narrow extremely, leaving little room to move and making it subject to a breakout. The bears managed to break down the lower acting trend line, inviting a further wave of selling pressure.
The price has continued to fall since the breach; a breakout and retest of the structure has left the door wide open to more downside. It has dropped another 10% since coming out of the pennant. XRP/USD price movement has again seen the construction of another pennant formation.
Price Enters Big Buying Zone
XRP/USD has entered a sizeable known area of demand, which runs from $0.3000 down to $0.2500. The price has managed to find buyers here on several occasions; strong interest is typically found here. It has not traded below this zone since December 2017, proving the significance of the territory.
Given the downside momentum and technical developments, eyes are on further moves to the south. In terms of targets; $0.2800, $0.2700 and then $0.2550 should be eyed. Stops would be placed just above the most recently breached pennant, $0.3055.
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.