Ripple (CRYPTO:XRP) has seen significant price action over the past few weeks, with the cryptocurrency reaching a new 3-month high of $0.91 on March 28. However, the digital asset has since exhibited signs of a slowdown in momentum, with its value dipping below the $0.84 mark on multiple occasions in the past week.
Some market observers have attributed this pullback to increased selling pressure from Ripple’s large holders, who may be looking to take profits after the cryptocurrency’s Feb. 24 – March 28, 44% gain. Others have speculated that renewed concerns about regulatory uncertainty could be weighing on sentiment around XRP. Whatever the case may be, it appears that Ripple is now settling into a more subdued trading range following its impressive rally.
Another upswing or a steep correction
Following the decline from the $0.91 level, XRP retraced below the $0.84 area. This fall is nothing out of the ordinary, as it was simply a retracement following the initial rise in price. Additionally, like many of the altcoins in the industry, the price of XRP is highly correlated to the price movement of Bitcoin (BTC). While this correlation does not always hold true, it is generally accurate and can be a good indicator of the overall market sentiment.
On the other hand, the interesting thing to watch as Ripple’s price hovers around the $0.85 barrier, will be how the crypto behaves if it rejects this level and falls further in price. If this happens, it will be worth keeping an eye on the $0.80 support level in order to see if XRP is able to hold steady there or continue its downward trend towards the $0.75 area.
Such a downward move, which will trigger the flipping of these resistance levels into support, could open the door for bears to crash XRP to $0.70 – $0.65 zone. Therefore, a move below the critical $0.80 level and failure to reclaim it, would void the bullish thesis.
Conversely, Ripple bulls would need to produce a decisive rally from current levels and close above $0.90 to confirm the start of a new uptrend. A rally will get the bull crowd motivated as an increase in money flows would indicate the rally is likely to stick. Even more importantly, the buyers’ sentiment will push XRP to retest and possibly break the psychological $1.00 barrier.
Price Action
XRP was last changing hands above $0.82, down 2.34% on the day. In the year-to-date, Ripple prices have declined about 5%. The $39 billion market cap cryptocurrency has lost about 25% of its value on a year-over-year basis.
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