XRP Cryptocurrency Risks 38% Drop Amid Bearish Indicators
XRP Faces Potential 38% Correction
The cryptocurrency XRP could experience a significant 38% correction if the bulls do not show up in large numbers. On January 18, XRP dropped to $0.55, suggesting that the token is at risk of falling below the crucial support zone. Since the start of the new year, XRP has already lost 12.64% of its value. Analyst Ali Martines believes that seller exhaustion is not likely to occur soon, as the price could drop to as low as $0.34.
No Break for the Bears
Martinez’s opinion is based on XRP’s slip under the ascending channel. Had the price risen above the channel, XRP could have risen beyond the lower limit. However, since it has fallen, a downward movement seems likely. An analysis of the analytics tool Santiment suggests that the decline could also be associated with intensive profit-taking. According to data from the crypto intelligence platform, the percentage of total supply in profit was 80%. Although it has fallen from the historical high of 88%, it still poses a risk to the XRP price.
An ETF Might Not Save XRP
Should the bulls not show up in droves, XRP might have no choice but to shrink. There were speculations that an XRP ETF could come to save XRP from a correction. This was due to the response BlackRock’s CEO Larry Fink gave in an interview with Fox Business. Fink said he could “not talk about it” when asked about a possible XRP ETF. But this rumor could now have been silenced due to new reports. Charles Gasparino, a senior correspondent at Fox Business, reported that BlackRock has no plans to launch a spot XRP ETF.
No Prospect of Short-term Recovery
At the time of writing this article, XRP had fallen below the crucial mark of $0.55. An examination of the Directional Movement Index (DMI) found that there is little prospect of a short-term recovery. The -DMI (red) was at 26.77, while the +DMI (green) was at 14.46. This position was considered bearish for the token. In addition, the -DMI seemed to have the support of the Average Direction Index (ADX). The ADX (yellow) closed at 25, and if it exceeds the reading while the -DMI remains higher, XRP’s first stop could be $0.50. Moreover, the RSI indicator was bleak, as the reading fell to 36.18.
Sources: Santiment, TradingView
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