XRP, the token caught in a longstanding court battle with the United States Securities and Exchange Commission (SEC), has rolled back to seek support and sweep through liquidity before resuming the anticipated run-up to $1.
Down 2.3% on Friday, XRP is trading at $0.515 with $789 million in trading volume coming in. Providing immediate support to the cross-border money remittance token is a multi-month ascending trendline, dating back to the beginning of the year.
Bulls have every reason to hold this support intact, considering XRP is trading below all the major moving averages, including the 50-day Exponential Moving Average (EMA) (red), the 100-day EMA (blue), and most importantly the 200-day EMA (purple) at $0.5253.
XRP On The Edge of Another Downfall
XRP is back to trading levels last seen before the July ruling in the Ripple vs. SEC case. After the court ruled that secondary sales of XRP tokens on exchanges like Binance imply that it is not a security contrary to sales made directly to institutions.
While this rule was a win for XRP, the remarkable rally that followed the ruling quickly faded before reaching $1. XRP achieved a new 2023 milestone at $0.93 in July and ever since, the token has been losing ground.
Last week’s sell-off saw XRP plunge below two critical support/resistance areas at $0.6 and $0.5. The bearish candle wick stretched to $0.42, but a knee-jerk reflex reaction by the bulls pulled the price above $0.5.
Traders considering new positions in XRP must tread cautiously by waiting for the trend to confirm before firing up the orders. It is too early to tell if the fifth-largest crypto will rebound from the ascending trendline toward the coveted $1, or extend the declines to $0.42 or worse $0.3.
A bearish outcome with XRP losing ground is most likely if sellers insist on pushing for action below the trendline or $0.5.
The Moving Average Convergence Divergence (MACD) affirms the bearish outlook as it sustains a sell signal. Investors should consider XRP an asset worth shorting as long as the MACD line in blue holds below the signal line in red.
Any attempt to make a quick rebound is bound to face major challenges, especially with the Money Flow Index (MFI) stuck close to the oversold area. This shows that the influx of funds into XRP markets falls short compared to the outflow volume. In other words, the momentum is not enough to keep the token on an uptrend.
That said, short positions in XRP are likely to stay profitable over the weekend, but traders should be vigilant and keep an open mind for a possible bounce to $0.6 if the MACD flips bullish and sends a buy signal.
Will Robinhood List XRP?
Rumors have this week increased speculation over the American digital asset trading app, Robinhood listing XRP before the end of 2023. Many believed such news would greatly benefit Ripple’s payment system’s native token, which has dropped to pre-judgment levels.
Robinhood will eventually list $XRP soon and it will green light us to $10+ 😎
— XRP whale (@realXRPwhale) August 21, 2023
The speculation started with an anonymous report from an alleged insider. As the court battle between the SEC and Ripple rages on, it is normal for the community to hope for another catalyst that could trigger another price rally.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.