- The supply in profit hit high levels, suggesting a rise in realized gains.
- XRP’s momentum remained bearish, indicating a possible significant decline.
XRP fell to $0.55 on the 18th of January, indicating that the token risked dropping below the crucial support zone. Since the new year began, AMBCrypto has tracked XRP’s performance. At press time, it had lost 12.64% of its value on a Year-To-Date (YTD) basis.
But analyst Ali Martines thinks that seller exhaustion won’t occur anytime soon as the price could drop as low as $0.34. If that happens, it would mean another 38% correction for XRP.
$XRP is currently grappling to maintain its footing at the crucial $0.55 support level. Should this support fail to hold, be prepared for a possible sell-off scenario that could see #XRP descending toward $0.34! pic.twitter.com/6oKObjpnnm
— Ali (@ali_charts) January 18, 2024
No days off for the bears
As stated above, Martinez’s opinion was because of XRP’s slip below the ascending channel. If the price had risen above the channel, XRP could have bounced above the lower boundary. But since it slid, a movement down the chart looked likely.
An assessment of analysis tool Santiment showed that the decline could also be linked to intense profit-taking.
According to data from the crypto intelligence platform, the percentage of total supply in profit was 80%. Though it had dropped from the historical high of 88%, it still posed a risk to the XRP price.
For instance, when the metric was around the same percentage in April 2023, the price fell from $0.53 to $0.42 within a short period. In August of the same year, a similar thing happened.
Source: Santiment
An ETF may not come to XRP’s rescue
Should bulls fail to appear in droves, XRP might have no other option than to shrink.
However, there was speculation that an XRP ETF could come at some point, and save XRP from correcting. This was because of the response BlackRock’s CEO Larry Fink gave in an interview with Fox Business.
During the interview, Fink said he could not “talk about it” when asked about a possible XRP ETF. But that rumor might have been put to bed now because of new reports.
According to Charles Gasparino, a senior correspondent at Fox Business, BlackRock does not have plans to launch a spot XRP ETF.
SCOOP: @BlackRock has no plans for a spot $XRP ETF, according to people with direct knowledge of the matter story developing
— Charles Gasparino (@CGasparino) January 18, 2024
As of this writing, AMBCrypto confirmed that XRP had fallen below the crucial $0.55. We then looked at the Directional Movement Index (DMI). This was to ascertain if there was any chance of recovery in the short term.
But on looking at the DMI, we discovered that the -DMI (red) was 26.77 while the +DMI (green) was 14.46. This position was considered bearish for the token.
Also, the -DMI seemed to have the backing of the Average Direction Index (ADX).
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The ADX (yellow) closed on 25, and if it surpasses the reading while the -DMI remains higher, XRP’s first stop could be $0.50.
Furthermore, the indication from the RSI was gloomy as the reading dropped to 36.18.
Source: TradingView
