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Ripple‘s partial victory in the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) on July 13, which has been ongoing for over 2.5 years, resulted in a 90% increase in XRP. During the rally, the price of XRP surpassed an important supply zone near $0.9118 and reached as high as $0.938. However, selling pressure and exhausted bullish momentum caused the rally to come to a halt.
XRP Price Analysis
After bouncing back from the resistance at $0.9118, the XRP price entered a correction mode and dropped by 25% to retest its support at $0.685. This pullback can be considered as a result of short-term investors taking profits.
At the time of writing, XRP is trading at $0.723, and candlestick formations indicating a reversal in the downtrend reflect that the price can stay above the $0.685 support. This horizontal level aligns with the 38.2% retracement level of the Fibonacci Retracement Tool, providing a strong base for buyers to push the price higher.
After consolidating the price for a while with the strength gained from the support at $0.685, buyers may push the price back up. However, since the price has already dropped significantly and appears to have completed its correction, it could be expected to break and surpass the psychologically important level of $1 with the support of new supportive news or announcements in the future.
How Much Further Can the XRP Price Drop?
With the crypto market facing a more severe correction, XRP could drop below the $0.685 support and reach $0.62, which is the same level as the 50% retracement level of the Fibonacci Retracement Tool, with an additional 10% retracement. Further pullbacks could open the door to more significant declines as it could result in a decrease in buyers’ confidence in the altcoin.
However, it is worth noting that XRP reaching the upper band of the Bollinger Band technical analysis tool indicates an overextension and a need for correction in the current trend. Additionally, the Average Directional Index (ADX) on the daily timeframe approaching 27% suggests that buyers still have a strong hold on the uptrend.
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