Ripple (XRP) price experienced a 17% drop from December 16 to December 18, before a minor bounce from the $0.57 support zone. Despite this, indicators from technical analysis suggest that long-term investors should not panic.
Some investors considered this recent price pullback as a buying opportunity. If Bitcoin (BTC) bulls can successfully defend the $42,000 region and push the price higher, it will likely please XRP investors and the broader market audience.
Critical Level in XRP
An examination of XRP’s one-day price chart reveals a support zone between $0.57 and $0.61. In lower time frames, this area had contributed to the formation of a bullish market structure in mid-November. Consequently, XRP had reached $0.7 without experiencing a price drop.
After this period, the price retreated to the $0.6 level, yet the On-Balance Volume (OBV) began to rise steadily. This reflected a consistent buying pressure from investors, keeping the expectations for XRP’s potential rise alive. At the time of writing, the Relative Strength Index (RSI) was indicating a downward momentum, showing 45.
The $0.6 price level could represent a good risk-reward buying level for XRP bulls aiming for $0.7 and above, provided that Bitcoin does not undergo a major sell-off.
The Future of XRP
Heatmap data from Hyblock could also provide insights for investors. Looking at the last three months, areas between $0.55 and $0.565 show high volume estimated liquidation levels.
Therefore, the market could benefit from the collection of liquidity at this level in terms of market vitality and liquidity inflow. The absorption of liquidity in this region could pave the way for a potential price jump higher. The upper regions at $0.63 and $0.68 also represent small but notable liquidity levels.
Lastly, the $0.686 level has been maintaining its presence as a resistance for XRP since November 11. Therefore, it is possible that a new price range between $0.58 and $0.68 could form in the coming weeks.
