Recent Price Developments
XRP/USD remains firmly in the control of the market bears. The price running within its third consecutive daily session in the red. Since the 7th November, when this stubborn downward trend kicked into gear, the price has dropped around 28%. Falling from the $0.55 territory, down to current levels, seen around the $0.4000 area. Key areas of support continue to be breached. Given current momentum of the selling pressure, there is room for the price to effectively half.
As mentioned in the previous article, XRP/USD broke out from a pennant pattern structure. The price also observed a daily closure below. As a result, this left the door wide open, for the bears to further capitalize in dragging the price down south. It had been trading within the confinements of this pennant for just over nine weeks, going back as far as September. The firm daily closure below the lower trend line support, was seen on 20th November.
XRP/USD Remains Vulnerable
Current price action still looks very much in favor of deeper downside. Between the 20-22 November, XRP/USD was further consolidating. As a result, the price once again formed a small pennant pattern. A firm breach lower from the structure, was seen on 22nd November, sellers pilling in on the break, momentum carried through until 23rd November session. Following this bearish intensity, XRP/USD is moving within a consolidation block, subject to an extended drop.
The range observed over the past day has narrowed. XRP/USD is moving between a high of $0.4250 down to $0.4000 area. This behavior, judging by recent technical developments, indicates of further vulnerabilities to the price. Should a breach of the lower part of this mentioned consolidation block, it will likely trigger another explosive move south. The next potential drop could be must more punishing to XRP/USD.
Looking to the downside, a slip below the $0.4000 mark will see the 11-12 October low area come into play. This is observed at the round $0.3800 figure. The last time the price fell to this territory, strong buyers flew in to support and send XRP/USD higher. Any failure of this holding will be very punishing to say the least. It opens the gateway for a return down to $0.30-$0.25 range, where a chunky demand zone is eyed. XRP/USD last traded here on 18thSeptember.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.