XRP Faces Threat of Losing July’s Gains as Bearish Pressure Persists
The recent surge in Ripple’s XRP during July, following a partial legal victory against the SEC, resulted in significant gains of over 70%. However, the bearish sentiment that emerged in mid-July remains strong and poses a threat to wipe out the gains made last month.
The downward trend has now extended into August, intensifying concerns that all of July’s profits could be erased. Nevertheless, there is a crucial support zone from 2022 that may influence market participants and potentially stem further losses.
Examining the weekly chart, the $0.5600 – $0.6575 range (cyan) served as a support zone between July and December 2022. During the same period, it also acted as a weekly bullish order block. However, it turned into a resistance zone in the second quarter of 2023, only to be broken in the third quarter.
Currently, XRP has declined to that very support zone, experiencing a 35% drop after being rejected at $0.94. It is possible that there will be a search for liquidity below this zone, potentially reaching $0.5 in the coming days or weeks. However, if the support zone is successfully retested, a rebound towards $0.90 could be feasible.
On the flip side, if Bitcoin loses its hold at $28k and continues to decline, sellers might drive XRP down to $0.41 or even $0.30.
Looking at the indicators, the RSI has remained above the median mark since April, indicating moderate buying pressure during the second quarter. However, the Chaikin Money Flow (CMF) recently dipped below zero, highlighting capital outflows in the past few days.
Between August 15th and 16th, XRP’s Cumulative Volume Delta (CVD) showed a downward trend, suggesting that sellers had greater market control before and after the release of the FOMC Minutes.
The sharp decrease in Open Interest (OI) rates from over $680 million to approximately $580 million during the same period further strengthens the bearish hold on XRP.
Although there has been a slight improvement in these indicators, there are no clear signs of a price reversal. Thus, it is essential to closely monitor BTC’s movements before making any trading decisions.
In conclusion, XRP’s impressive gains from July are under threat as the bearish grip persists. The crucial support zone established in 2022 may offer some relief, but further downward pressure could lead to an erosion of last month’s profits. Traders and investors should carefully assess the market conditions, considering both the upside potential and the possibility of extended losses.
