23 December 2020, will be a day XRP holders would want to forget. The 52.92% drop during a 24-hour window indicated a catastrophic impact following news breaking regarding SEC’s decision to file a lawsuit against Ripple. Market corrections took charge the next day, and the coin managed to register a position above $0.33.
While the current trend continues to look a little grim, here’s the long-term analysis of XRP.
XRP 1-day chart
From the start of November to date, XRP has completed a full cycle of highs and lows. From $0.23, the asset managed to surge to $0.79, and after consolidating above $0.55 for a couple of weeks, bears took over the charts. Between 19 and 23 December, all gains registered during the late November rally were wiped clean. At press time, the asset managed to move just above $0.33, and the silver lining remains its immediate recovery above the ascending support.
While $0.42 remains the main resistance the coin needs to undertake over the next couple of days, it might not be that easy for XRP to regain strong bullish momentum.
Market Indicators are suggestive of recovery as well. After registering a position at the oversold region for the first time since June, buying pressure was able to gather a bit of momentum upward.
Awesome Oscillator continued to be under the strong grip of bears, with red candles evident in the chart. 50-Moving Average is acting as an overhead resistance at the moment, suggestive of strong sell pressure above $0.42.
Resistance at $0.42 is important because of its significance on the weekly chart. As illustrated above, XRP maintained a weekly position above $0.42 for 4 weeks before the recent calamity. Hence, for the asset to register a strong bullish recovery next week, its price needs to open above $0.42 before the start of 2021. However, it seems less likely at the moment, with the negative social sentiment.
XRP will possibly lock in a position above $0.33 but breaching $0.42 would require more bullish momentum.