Bitcoin (BTC) has been showing strength recently, as the price surged from $3,750 to $6,650 in a matter of one week. Not only have Bitcoin and crypto been showing strength, but a similar move is also seen in the equity and commodity markets.
The United States’ equity markets have seen a relief bounce of 23%, while gold and silver showed a bounce of 13% and 25% as well. However, altcoins have been showing weakness, as Ethereum (ETH) is back to the 0.0205 satoshis level, while XRP (XRP) is now sitting on a crucial level.
What can the markets expect for the XRP price?
Crypto market daily performance. Source: Coin360
XRP holding crucial level in BTC pair
The price of XRP is showing weakness, as the price is showing a clear downwards trend on the BTC pair. Alongside with the downwards trend, crucial support is tested for support. The support is 0.00002350-0.00002400 satoshis. However, losing this support level would cause the price to make a substantial drop to 0.00001400-0.00001500 satoshis, a drop of 40%.
XRP BTC 1-week chart. Source: TradingView
The chart shows a clear drop in 2019 to the support level of 0.00002350-0.00002400 satoshis. This support level provided a bounce upwards. However, the resistance area wasn’t broken to the upside. A strong rejection at 0.000036-0.0000375 satoshis shows the chart, after which the support at 0.000024 satoshis is tested again.
The more often resistance or support gets tested, the weaker it becomes. Given that the support level is tested quite often, traders could expect a downwards break to occur. The moment that the price of XRP drops below this level, a further downwards drop of 40% could be anticipated, as the next support is found at 0.00001400-0.00001500 satoshis.
XRP BTC 1-day chart. Source: TradingView
The daily timeframe is clearly showing a downwards trend. The price of XRP is continuously making lower highs, after which the support gets tested many times. Recently, the price of XRP broke below the critical support at 0.00002500-0.00002575 satoshis, which is a basic level to reclaim.
Right now, the 0.00002360 satoshis level is the last level of support before 0.00001500 satoshis come into play. To get a bullish view for XRP, the previous support at 0.00002500-0.00002575 needs to be reclaimed as support. However, that’s not entirely making the movements of XRP bullish.
The next step to make a bullish perspective for XRP would be to make a higher high above 0.00003365 satoshis. Given the current market sentiment, such a move seems less likely to occur.
XRP/USD is showing a clear downtrend
XRP USD 1-week chart. Source: TradingView
The USD chart of XRP is showing a clear downwards moving trend. The price of XRP is resting on the final support at $0.145, which is crucial. If the price of XRP drops below the $0.145 level, a further downwards drop is likely to occur. Traders should target $0.06 as the next support level in that case.
Such a downwards would be combined by a deep drop on the BTC pair, as discussed previously. However, such a drop would also be caused due to weakness in the cryptomarkets in general.
The price movements are comparable to the movements in the previous cycle, as the price of XRP retraced back to the support level prior to the deep surge in the last cycle too. Similar movements are currently occurring in the crypto markets.
The $0.145-0.15 level is the massive support before the massive 2000% increase in the 2017 bull market. Right now, the price of XRP retraced back to that level, giving all the gains of the previous bull cycle back to the markets.
Daily timeframe needs to reclaim $0.20 for support
XRP USD 1-day chart. Source: TradingView
The price of XRP is showing clear support at $0.145 and resistance at $0.182 and $0.20. Is it possible for the price of XRP to become bullish short term? Yes, there are some movements needed to create some bullish momentum.
First of all, the price needs to hold the $0.145 level for support, after which the resistances at $0.182 and $0.20 needs to be cleared to the upside. The moment that XRP reclaims the previous support at $0.20 for support, then there’s a possibility that the price continues to rally towards $0.30-0.33 as the next resistance.
Such a move would confirm that XRP was copying the movements of the previous crypto cycle in 2014-2016. In that cycle, the price of XRP fully retraced the bull move, after which a sideways accumulation period of one year occurred. If the price of XRP moves to $0.32 in the coming months, a similar period of sideways accumulation should be expected.
For further bullish momentum and sentiment, the price should make a new higher high. In that case, the price of XRP needs to move above $0.33 to create one.
However, if $0.145 is lost as support, a drop towards $0.06 is on the tables and can be expected.
BTC pair needs to reclaim 0.000025 satoshis as support
XRP BTC 1-day chart. Source: TradingView
The BTC pair needs to claim the 0.000 02500-0.00002575 satoshis level as a first step. If XRP can reclaim this level for support, further upwards momentum is warranted in the short term. Potential levels and resistances to be tested are 0.00002800 and 0.00003100 satoshis.
However, a similar conclusion can be made for the BTC pair as for the USD pair. The price of XRP needs to make a higher high above 0.00003350 satoshis to become bullish. As long as that doesn’t happen, then the price remains in a downwards, bearish trend.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.