Why Analysts Expect XRP Drop as the Cryptocurrency Slides Lower
- XRP is preparing to plunge lower as the cryptocurrency forms a bearish price pattern.
- The cryptocurrency is actually down 1% in the past 24 hours, despite Bitcoin rallying a handful of percent.
- XRP’s underperformance of the leading digital asset may add pressure to its move to the downside.
- One analyst is eyeing a $0.25 price target for the altcoin, which is around 10% below the current price.
XRP Could Drop Towards $0.25 As Price Action Loses Momentum
XRP is preparing to move lower in the days ahead as the asset fails to hold above a critical downtrend formed at the August 2nd highs, according to one trader. Referencing the chart below, which shows XRP’s rejection at the downtrend and the asset’s inability to hold technical supports, the trader wrote:
“$XRP #Ripple (USDT) update – breakout was a “False move”, 25 cents seems reasonable, lower range of high wave spinning top.”
Chart of XRP's price action over the past eight weeks with a price analysis by trader "Cheds" (@BigCheds on Twitter). Chart from TradingView.com
The cryptocurrency falling to $0.25 from current levels will see it incur a loss of approximately 10%.
This isn’t the only trader expecting XRP to correct further as it fails to retake critical technical levels. Michael Van De Poppe, a cryptocurrency analyst who trades at the Amsterdam Stock Exchange, recently wrote:
“Buy the dip zones: $0.212 and $0.245. Next resistance zone if this massive one breaks: $0.40. I doubt we’ll continue rallying, but I will be very satisfied to buy the dip,” he commented in an analysis published August 6th.
Chart of XRP's price action with analysis by cryptocurrency trader and writer Michael Van De Poppe (@CryptoMichNL on Twitter). Chart from TradingView.com
XRP has also formed a “sell 9” candle on its daily chart as per the Tom Demark Sequential. The Tom Demark Sequential is a time-focused indicator that forms “9” and “13” candles when an asset has reached an inflection point in its trend; “buy 9” candles are seen when the indicator predicts bullish continuation and “sell 9” candles are seen when the indicator thinks a trend has found a top.
All Eyes on Bitcoin
At the end of the day, XRP’s price action may be dictated by that of Bitcoin. Altcoins, after all, can be closely correlated to the market leader.
Analysts are actually leaning bullish on Bitcoin as it once again fails to enter a full-blown downtrend due to a last-minute effort from buyers. One trader made the following comment as Bitcoin bounced on Wednesday morning:
“Took out the highs then took out the lows into demand, all within the range of the candle that started the month with a HTF retest. Above the pivotal zone and swing high at $11550 and we should have another crack at breaking $12k.”
How exactly XRP reacts to Bitcoin’s price action, though, remains to be seen.
Featured Image from Shutterstock Price tags: xrpusd, xrpbtc Charts from TradingView.com Why Analysts Expect XRP Drop as the Cryptocurrency Slides Lower