Major Correction Ahead if Buyers Lose this Key Support

In the weekly time frame chart, the XRP price shows the formation of a cup and handle pattern. The chart setup often spotted at the bottom indicates a high probability of bullish reversal. As of now, the coin price trades at $0.59, and is forming the handle portion or pullback in the prevailing rally. Will this retracement lead to a fresh uptrend in the Fifth largest cryptocurrency?

Also Read: XRP Sideways Market Structure Extends – Can Shorts Turn Profitable?

XRP Price Analysis: Key Points

• XRP correction backed by decreasing volume reflects the buyer exhaustion 
• The Crypto buyers can witness suitable demand pressure from the $0.56 support
• The intraday trading volume in the XRP is $1.6 Billion, indicating a 93% gain.

Source: Tradingview

For over a month, the XRP price has been in a correction phase, where the prices plunged from the June 13th high of $0.938 to a $0.58 low. This correction registered a loss of 37.6% loss and plunged to the 50% Fibonacci retracement level.

A 50% retracement level is considered healthy to absorb the excess supply pressure and stabilize the asset for higher levels. By the press time, this altcoin trades at $0.592 and hovers above the $0.58-$0.56 support zone.

The buyers should manage to sustain this level to recuperate the exhausted bullish momentum. A potential bounce back from $0.58 will bolster bulls for a 58% rally and challenge the $0.935 neckline resistance.

A breakout above the $0.935 neckline will give a better confirmation of trend reversal.

Will XRP Extend Correction Trend?

Amid the increasing uncertainty in the crypto market, the XRP price could continue to consolidate above $0.58. However, considering a pessimistic approach, the sellers could give a breakdown below the mentioned support. With this breakdown, the coin price will also lose 61.8% FIB level, and bolster the price for a major correction to $0.426, or lower.

• Exponential Moving Average: The weekly EMAs(20 and 50) gathering near $0.56 could offer additional support to buyers.
• Directional Movement Index: A positive crossover state between the DI+(blue) and DI-(orange) slope reflects buyers hold enough momentum to trigger a bullish reversal.