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Quick grip:
- XRP underwent a correction due to a weakening of Bitcoin
- The throw-in also enjoyed a parabolic run due to a retirement
- There are also rumors that the US Treasury prohibits self-custody of digital assets
- XRP’s $ 0.50 support held and is crucial in determining its next trajectory
XRP’s digital asset has lost a good amount of its value since it released a two-year high of $ 0.78 – Binance rate – on the 24th of this month. At the time of writing, XRP is trading at $ 0.53 after suffering a drop in the $ 0.47 price area earlier today. The drop to the latter was a 40% drop from the aforementioned peak value of $ 0.78.
Because the value of XRP has dropped
As with all altcoins, the fate of XRP is tied to that of Bitcoin and the King of Crypto has also undergone a significant pullback in the last 48 hours. A quick glance at the Bitcoin chart reveals that BTC fell from the $ 19,400 set yesterday, to the $ 16,300 support area. This is a 16% drop by Bitcoin and one of the reasons why XRP fell 40%.
Secondly, XRP recorded an impressive parabolic run due to the hype surrounding the Flare Networks snapshot event on December 12th. In early November, XRP was trading around the $ 0.24 price area. The remittance coin then increased 3.25x in less than a month due to the Flare Networks snapshot event.
Such an impressive rally is usually accompanied by a pullback that can eventually wipe out 80% of gains as witnessed with Bitcoin in December 2017.
Third, there were rumors circulates that the US Secretary of the Treasury is planning a regulation that would see cryptocurrency owners in the US banned from storing their digital assets. They would be allowed to own digital assets only through third parties such as financial institutions. These rumors have rocked the entire cryptocurrency market.
XRP’s $ 0.50 support zone is maintained
As mentioned above, XRP is trading at $ 0.53 as it has recovered the $ 0.50 price area as support. This area should be a sizable battle zone for bulls looking to keep the snapshot hype alive as we arrive in December. To determine the near term future of XRP, the following daily chart should be used.
The following can be seen from the graph.
- XRP is clearly in overbought territory judging by its extreme deviation from the three moving averages: 50, 100 and 200 days
- The trading volume is clearly in the red confirming the increase in sales
- The daily MACD suggests a pullback with its histograms indicating a reduction in purchases
- Daily MFI and RSI are high at 86 and 77 confirming that XRP may continue to decline in value
- If the $ 0.50 support area is lost, XRP has additional support zones at $ 0.48, $ 0.45, $ 0.42, $ 0.38, $ 0.34, $ 032 and $ 0.30
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