Will Bulls Defend the Support?

Ripple’s XRP price bounced on August 7 but failed to sustain its increase. The drop on August 17 invalidated a bullish XRP count that would have taken the price to $1.

If the XRP price does break down from the current pattern, it can fall by another 28% and reach the $0.35 horizontal support area.

XRP Price Invalidates Bullish Count

The technical analysis from the daily time frame gives a bearish outlook for XRP.

The primary reason behind this analysis stems from the wave count and price action. Technical analysts use the Elliott Wave theory to determine the likely direction of a trend by examining repeated, long-term price patterns and investor sentiment.

Prior to this week’s decrease, the most probable scenario suggested that the value of XRP is approaching the bottom point of the fourth wave within a five-wave upward movement (white).

This became likely after the XRP price bounced at the previous ascending parallel channel (green icon).

However, the ensuing decrease has invalidated the possibility. The XRP price fell below the invalidation level at $0.56 yesterday (red line) and decreased to the channel’s support line.

A breakdown from the channel can cause another 28% drop that takes the price to the $0.35 horizontal support area.

If the XRP price were to bounce, a 25% increase that takes the price to the channel’s resistance line at $0.63 will be likely. However, there are no signs that this will occur. On the contrary, the daily RSI is bearish. With the RSI as a momentum indicator, traders can determine whether a market is overbought or oversold and decide whether to accumulate or sell an asset.

Bulls have an advantage if the RSI reading is above 50 and the trend is upward, but if the reading is below 50, the opposite is true. The indicator is falling and is below 50, both signs of a bearish trend.

XRP Price Prediction: Are There Signs of a Bottom?

A closer look at the movement does not give hope to the possibility that the XRP price will bounce. The main reason for this is that the price has broken out from a short-term descending resistance line and then failed to validate it as support. Rather, the price fell below it on August 17 (red icon).

Moreover, the RSI does not support the breakout. The indicator is decreasing and has not gotten out of its oversold territory (white icon), both signs of weakness.

Reports regarding Ripple are mixed. The Ripple legal team has opposed the Securities and Exchange Commission (SEC) request for an appeal of the July ruling, stating that there are no extraordinary circumstances to warrant an appeal. However, U.S. Congressman Warren Davidson is critical of the XRP community for being “hyper-defensive” of the Ripple CBDC venture.

To conclude, this XRP price prediction trend is bearish. However, a strong bounce at the current level could initiate a 25% increase that would take the XRP price to $0.63. However, there are no immediate signs that support this possibility.

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