XRP Plunges 12% After Hitting $1.54 High... Will it Fall to $0.7?

▲ XRP

XRP's price, which has been on a recent downtrend, is struggling to maintain key support levels, facing a crossroads that will determine further declines or a rebound.

According to NewsBTC on May 20 (local time), the XRP price has fallen to the $1.35 area, its lowest level since late April. XRP traded in a range between $1.36 and $1.50 over the past month, attempting to break above the upper bound multiple times. Last Thursday, bolstered by news of progress on the US cryptocurrency market structure bill, it surged to a two-month high of $1.54. However, after being quickly rejected at that price level, it has retreated by about 12% over the past five days and is currently retesting the $1.35 area.

Market observer Chartner diagnosed that XRP is at risk of further price correction towards new lows. Chartner pointed to a confirmed dead cross in the weekly Stochastic Relative Strength Index and strong resistance levels above as concerning signals. Specifically, the weekly 20-day and 50-day exponential moving averages located at $1.50 and $1.80 are key resistance lines that have not been retested even once since the dead cross occurred last January. That crossover had pushed the XRP price down to its February low of $1.11.

Following its recent rally to $1.54, XRP's price is retesting the weekly 20-day exponential moving average for the first time since the January crossover. Chartner predicted that if this level is not successfully broken and converted into sustained support, there is a high probability of a further bearish phase opening up later this year. If the bearish scenario materializes, there is also a possibility of a fall to the cycle bottom of $0.70, which was a past macro resistance level but has not yet been retested. To invalidate the downtrend, both exponential moving averages must be reclaimed and turned into support, but Chartner added that it doesn't seem to be the time yet.

Meanwhile, analyst Ali Martinez assessed that XRP is preparing for a massive price movement soon. Martinez highlighted that the Bollinger Bands on the 3-day chart show their narrowest contraction in a year, defining the current compression zone as a clear no-trade zone. Such tight compression of volatility is a signal that a violent price expansion is imminent. Accordingly, he advised investors to wait for a 3-day chart candle close that decisively breaks out of XRP's current range of $1.29 to $1.50 to confirm the future major trend direction.

If the closing price forms above the upper boundary of $1.50, a price expansion towards $1.80 becomes likely. Conversely, if the lower boundary of $1.29 breaks, leading to a downward breakout, the immediate bullish structure will be invalidated. In this scenario, there is a high risk of a retreat as the door to a deep correction opens up to around the $1.00 level, which acts as a psychological support for market participants.

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