The 50 percent decline of Ripple's XRP token from the record highs may have strengthened the bears, but chart analysis indicates further downside may be limited.
As per data source OnChainFX, the world's third-largest cryptocurrency by market capitalization has depreciated by 16.85 percent in the last 24 hours. As of writing, XRP is trading at $1.88 levels.
Part of the price drop from $3.36 to $2.07 witnessed on Monday can attributed to data provider CoinMarketCap's unannounced decision to exclude three Korean exchanges, causing its global average to suddenly drop. The resulting selloff came to halt after the change in average calculation methodology became public, allowing for a partial recovery in the XRP price to $2.46.
However, the relief was short-lived. XRP fell below $2.00 yesterday and hit a 12-day low of $1.71 today.
The decline in prices over the last 48 hours highlights the bearish undertone across the wider crypto markets.
Stellar lumens has dropped by 15 percent over a 24 hour period; NEM and cardano are down 13 percent and 15 percent, respectively; while TRON has lost a hefty 24 percent in value.
Fighting the trend, the top performer is ether (ETH), which hit a new all-time high of $1,417 today. ETH has gained around 11 percent over 24 hours.
The bears are in control, courtesy of a bearish doji reversal (Jan. 4 doji candle and the negative price action on the following day), and a sharp drop to a 12-day low of $1.61 today.
The bearish 5-day and 10-day moving average (MA) crossover (short-term average cut long-term average from above) also indicate upticks are likely to be short-lived.
The rising trend line may offer support around $1.50.
The relative strength index (RSI) is pointing lower, but still holding above 50.00 (bullish territory).
XRP looks set to test the rising trend line support of $1.50. Dips below the same could be short-lived, given the RSI on 4-hour time frame and 1-hour time frame shows oversold conditions.
Bullish Scenario: A rebound from the trendline support, followed by a close above $2.15 (Jan. 5 low) would add credence to the oversold conditions as shown by the 4-hour and 1-hour RSI and signal further gain towards $3.00–$3.30 levels.
Bearish Scenario: A sustained move below $1.4154 (61.8 percent Fibonacci retracement) could yield a sell-off to sub-$0.50 levels.
Source: Coindesk