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Key Insights:
XRP climbed above $0.51 after a fall to $0.41 two days before. Its RSI has grown from 35 to 43, and MACD has converged.
However, if the price does not stay above its 200-day EMA, i.e., $0.544, it might crash to $0.41.
In the event of this crash, XRP might see a situation called as a dead-cat bounce.
News from the Ripple vs SEC case could also significantly impact the price.
The price of XRP fell from $0.64 to $0.43 between 31 July and 5 August 2024. The fall in the price came after a widespread sell-off in global crypto, stocks, and commodities markets. At press time, XRP was at $0.516, up by 3.16% over the last 24 hours.
The global sell-off was triggered by the possibility of an Iran-Israeli war and Japan's rising interest rates
Following the fall in crypto markets, XRP began to slide down from $0.64 and eventually reached $0.43. However, a quick crypto market recovery took place, and on 5 August, XRP managed to close its daily candle above $0.49.
Yet, the price could not recover above critical levels, and currently, this fall has broken the uptrend (from 08 July to 31 July), which took XRP from $0.41 to $0.64.
Now, if the price does not close above $0.54 in the next couple of days or by this weekend, XRP might end its bullish trend. In such an event, XRP might lose its current support of $0.5 and fall down to $0.41, making the current recovery seem like a "Dead-Cat Bounce".
A dead cat bounce is a scenario in which a price recovery is followed by a large fall. In this case, the recovery is from $0.43 to $0.5, which follows a fall from $0.64 to $0.43.
XRP faced pressure on its price growth even before the 2024 bull run. This was primarily due to the long-running case between the SEC and Ripple.
As you can see from the graph above, in the entire bull run, XRP hardly managed to cross $0.74 and remained near $0.5 for most of the time.
However, once news of a possible settlement with the SEC emerged, the crypto rallied from $0.43 to $0.64 between 8 July and 31 July.
Between 31 July and 5 Aug, the crypto again crashed to $0.43 but quickly rebounded to $0.5.
Thus, from the above data, it can be clearly inferred that XRP has a very strong support and buying zone at $0.4 and an equally strong support at $0.5.
Taking a look at its daily charts, we can see that XRP has a peculiar habit of returning to $0.5 levels, making it a quasi-stable coin. However, that might end soon, as the crypto has been witnessing high volatility recently
XRP Daily Charts as on 07 Aug 2024
XRP Daily Charts as on 07 Aug 2024
XRP has managed to pull itself above two resistance levels, $0.46 and $0.5, which now act as support levels. The above chart also shows that if XRP manages to stay above $0.5, it may soon move above $0.55 and resume its uptrend.
Both RSI and MACD seem to favour XRP in the near term. RSI has reversed from 35 to 43 at press time, signaling an end to the price fall. Also, the MACD is at its widest level and has started converging, which confirms the bullishness.
Further, after the fall, XRP has also managed to show two green candles on its charts, indicating increasing strength.
However, if XRP does not cross $0.54 this week, it might see a pullback towards $0.41. In technical analysis, this rebound ($0.43 to $0.5), followed by a fall($0.5 to $0.41 again), is called a dead cat bounce.
Yes, XRP might escape this 25% crash if its price stays above the 200-day exponential moving average (200 EMA). At press time, XRP's 200-EMA is $0.54. Otherwise, XRP's price might succumb to a downward trend and eventually reach $0.41.
However, in the event that any positive or negative news emerges on the Ripple vs SEC case, it could result in a rally or a further crash based on the news.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.