XRP seen to bounce back quickly after slump

In the last four days, XRP price has seen a massive sell-off and lost 40% of its value. But the digital asset has shown a notable comeback from a key support level and aims to regain its previous uptrend, with several indicators pointing in its favor.

Ripple price was one of the worst performers this weekend, with XRP trading at $1.28, 34% below its all-time high.

At some point, the currency was down more than 42%, and its market value has dropped to more than $58 billion. Despite that, the token still remains the fourth biggest digital currency in the world.

What happened to XRP?

In the past few weeks, Ripple price has somehow defied the odds to make its own steady ascent. This month, the crypto had risen by more than 263% before it registered its current low. This year, it was up by more than 725%.

The significant gains happened despite Ripple Labs having its toughest year in facing lawsuits from the Securities and Exchange Commission and losing some deals, especially a large one with MoneyGram.

The rally of the fourth-largest cryptocurrency is also because of the defiance by some traders about the platform’s risks. The current decline, therefore, can be mostly because of profit-taking by day traders and the challenges faced by Ripple Labs.

A quick recovery

On a 4-hour chart, XRP defended the 100 simple moving average (SMA) support level and needs to climb back up above the 50 SMA resistance at $1.56, which coincides with the 50% Fibonacci level.

A breakout at this point will catapult the XRP price at the $1.66 and $1.77 levels. But if the XRP is kept below the key resistance level, it could easily fall at $1.23 and could go down to as low as $1.16.

A good sign, though, is that there is significant buying pressure in favor of XRP as the number of large holders with 100,000 to 1 million coins has increased by 150 so far this month.

 

Image courtesy of Slidebean/YouTube

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