Ripple targets $0.50 as sell-off continues

• Ripple price slips below critical support as European equities drag.
• XRP price is set to shed at least 10% in the coming session as the sell-off picks up speed.
• Expect XRP price to shed around 18% and hit a 7-month low.

Ripple (XRP) price action is hurting investors and flashing red lights in financial markets. The biggest issue is that XRP price action is further selling off despite the Relative Strength Index (RSI) being firmly in the oversold zone. This means that sell-demand is so overpowering that bulls  are getting out of the way and waiting for the drop to continue, to as far as the following substantial support level around $0.48, before they consider going long again.

XRP price scares investors out 

Ripple price is penetrating below the monthly S1 support level at $0.58 and in the process looking to set  a new six month low. As investors appear to be backing off, Ripple price action does not look likely to pick up anytime soon, although the RSI is trading firmly in oversold. The reason behind this is that XRP price action keeps selling off regardless of the oversold  RSI, which is significant because it means that selling pressure is immense and could be linked to investors’ divesting their positions. 

XRP price will not see investors return to these levels anytime soon unless they reach a premium of $0.52 or even $0.48. Certainly, that last level would bring XRP price to a 7-month low which could trigger some investors to return to the scene for a lucrative buy opportunity. The RSI would be at the outer barrier of the oversold region by then, thus triggering some profit taking by bears, as they cover, reverting to the buy-side to close off their positions and book gains.

XRP/USD daily chart

Risk-off sentiment has come a long way and pushed several assets towards interesting low levels, which could trigger some buy-the-dip volume. This could accelerate into a U-turn in XRP price action without even having to tic test a fundamental support level as a prerequisite. This could mean that Ripple price jumps back above $0.63, and if that uptick continues systematically throughout the week, $0.78 could be quickly hit by Friday. This would set the scene for this weekend and next week as investors finally look beyond the short-term turmoil for longer-term upward potential.