Ripple’s XRP cryptocurrency has recently seen a tumultuous ride in the digital asset market. On August 7, there was a notable bounce in XRP’s price, offering a glimmer of hope for bullish investors.
However, the optimism was short-lived as a significant drop on August 17 dashed hopes for a sustained upward trend.
This abrupt decline invalidated a previously anticipated bullish scenario that could have propelled XRP’s price to $1.
XRP Price Disproves Bullish Count
Technical analysts have been closely scrutinizing XRP’s price movements on the daily time frame, and the outlook appears to be bearish.
The analysis is primarily based on the application of the Elliott Wave theory, which assesses long-term price patterns and investor sentiment to predict potential market directions.
Before the recent downturn, it seemed likely that XRP was approaching the fourth wave’s bottom within a five-wave upward movement.
This assessment gained credibility when XRP’s price rebounded from the ascending parallel channel. However, the subsequent decline shattered this possibility, with XRP’s price falling below the critical level of $0.56 and approaching the channel’s support line.
If the price breaks down from this channel, there’s a possibility of another 28% decline, taking XRP to the $0.35 horizontal support area.
As of now, there are limited indications of a price rebound. The daily Relative Strength Index (RSI), a momentum indicator used to assess overbought or oversold conditions, is signaling a bearish trend. With the RSI below 50, it suggests a bearish sentiment, especially when paired with a falling trend.
XRP Price Prediction
Examining the recent price movement, it’s evident that XRP has broken below a short-term descending resistance line without establishing it as a solid support level.
This break occurred on August 17, further eroding investor confidence. Additionally, the RSI remains in oversold territory, underlining the market’s weakness.
In terms of Ripple’s broader context, legal battles and mixed reports have added uncertainty to the XRP landscape.
Ripple’s legal team has opposed the SEC’s request for an appeal following the July ruling, arguing that there are no extraordinary circumstances to warrant such action. Simultaneously, U.S. Congressman Warren Davidson has criticized the XRP community for its defensive stance regarding Ripple’s Central Bank Digital Currency (CBDC) initiative.