The XRP price has pulled back in the past few weeks, and technicals point to a deep dive if it loses a crucial support level. Ripple dived from the year-to-date high of $3.40 to the current $2.2. This crash has led to a $62 billion wipeout as the market cap has plunged from over $189 billion to $127 billion.
XRP price crash despite strong fundamentals
The ongoing XRP price crash happened even after Ripple had some substantial positive news recently.
Its most important news came earlier this month when the Securities and Exchange Commission (SEC) voted to end its appeal against Ripple Labs.
This was an important thing because it meant that Ripple paid just a fraction of the $2 billion that the agency wanted.
Further, the decision means that Ripple Labs will now be at liberty to sign more deals in the United States. According to Brad Garlingouse, Ripple largely stopped making any major deals in the US following the SEC lawsuit, with most of its business coming from other countries.
Many American companies cited the ongoing litigation for refusing the deal. Therefore, with the Ripple case done, analysts anticipate that there will be more deals going on. Indeed, Garlinghouse noted that the number of deals signed six weeks after Trump’s election were more than those signed six months before that.
XRP price crashed even after Ripple continued its partnerships and regulatory wins. It recently partnered with Chipper Cash, a popular payment network in Africa. The company will now use Ripple’s technology to improve its payment network over time.
Ripple ETF odds have risen
The XRP price has also crashed as the odds of a Ripple ETF approval have jumped. There are now over 10 XRP ETF applications from popular companies like Grayscale, Canary, and Franklin Templeton.
Analysts believe that the SEC has no good reason to reject these funds since it has already accepted Bitcoin and Ethereum. Also, the judiciary has said that XRP is not a security. Indeed, Polymarket odds of an XRP ETF approval have jumped to over 86% this year.
Most importantly, Ripple has the resources it needs to build a viable alternative to SWIFT, a payment network that handles over $150 trillion in transactions each year.
To succeed, Ripple will need to onboard as many banks as possible, which is now possible now that the company’s legal liabilities have ended. Banks and consumers will prefer the On-Demand Liquidity (ODL) because it is a faster and cheaper alternative to SWIFT.
XRP price technical analysis
XRP price chart | Source: TradingView
The weekly chart shows that the XRP price has dropped this year. Its attempts to recover have found substantial resistance in the past few months.
It has now plunged below the 38.2% Fibonacci Retracement level at $2.24, a sign that the downward momentum is continuing.
Ripple price has also sunk below the 50-week and 100-week moving averages. Most notably, it has formed a head and shoulders pattern, a popular bearish sign in technical analysis.
Therefore, there are odds that the XRP price will continue falling in the coming weeks. This bearish view will become valid if the coin plunges below the support at $1.9770, the neckline of this H&S pattern. The bearish outlook will be invalidated if the coin rises above the key resistance level at $3.0.
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