In recent days, the XRP cryptocurrency market has been marked by significant turbulence, leading to a notable downturn in its price trajectory. This downturn stems from a speculative surge fueled by rumors surrounding a potential BlackRock exchange-traded product (ETF) tied to XRP, resulting in a rollercoaster ride for investors and the broader crypto community.
Understanding the recent market dynamics reveals a series of events that have had a profound impact on XRP’s performance, particularly prior to and on November 17. Let’s delve into the intricacies behind the recent downturn and its implications for investors.
The market upheaval began on November 13 when XRP experienced a sudden 12% spike, reaching approximately $0.75. This surge was triggered by speculative chatter surrounding a purported BlackRock ETF focused on XRP. However, Bloomberg’s ETF analyst, Eric Balchunas, swiftly dispelled these rumors, leading to a rapid collapse in XRP’s value back to its initial levels for the day. The aftermath of this speculative surge resulted in extensive liquidations, predominantly affecting long position holders in the market.
During this period, between November 13 and 14, the derivatives market witnessed a staggering $17.5 million in long liquidations, significantly outweighing the $2.87 million in short positions liquidated, as reported by Coinglass.
The repercussions of the BlackRock XRP ETF speculation lingered throughout the week, contributing significantly to the downward trajectory of XRP’s price. Notably, on November 17, the cryptocurrency experienced a further decline of over 7.5% in a span of 24 hours, witnessing long liquidations valued at approximately $5 million compared to $300,000 in short liquidations.
Apart from the ETF speculation fallout, XRP’s price weakness on November 17 correlated with a slight decrease in holdings among its wealthiest addresses. Addresses holding between 100,000 XRP and 100 million XRP saw modest drops since the BlackRock ETF rumors. Conversely, the cohort with a balance ranging between 100 million and 1 billion XRP observed a marginal increase.
The technical aspect further elucidates XRP’s price decline on November 17 as part of a correction phase following its test of a historical resistance trendline near $0.75. The cryptocurrency entered an overbought phase on November 6, evident from its daily relative strength index (RSI) reaching its highest level since July 2023. This overbought status typically precedes sell-offs, contributing to the ongoing correction.
XRP’s price performance on November 17 can be seen as part of a broader correction that commenced after testing a historical resistance trendline around $0.75. The cryptocurrency entered into an “overbought” territory on November 6, according to the daily Relative Strength Index (RSI), signaling an impending selloff.
This correction phase was accentuated by a decline after testing the upper trendline of a massive ascending channel it has been traversing since mid-2022. Currently hovering around $0.60, XRP faces the risk of descending towards the lower trendline near $0.50, marking an 18.5% drop from its present value.
Does the recent downturn signal the end of the XRP bull run? The current price decline appears to align with a typical correction within a bull market cycle, suggesting a potential resumption of the general uptrend. XRP/USD has been fluctuating within a significant ascending channel since June 2022. As of November 2023, the cryptocurrency is undergoing a correction phase after testing the upper trendline of this channel as resistance.
From a technical perspective, there’s a risk of XRP declining towards the lower trendline near $0.50, marking an 18.5% decrease from current levels. Interestingly, this downside target aligns with XRP’s 50-week and 200-week exponential moving averages (EMAs), levels that previously served as support between March 2021 and January 2022.
Conversely, a decisive breakout above the current resistance level around $0.75 could propel XRP towards $1.13 in 2023 or early 2024, marking an impressive 80% increase from current levels.
In conclusion, the recent turbulence in the XRP market, sparked by the BlackRock ETF speculation, has led to a notable downturn in its price trajectory. However, considering the historical market patterns and technical indicators, there remains a possibility of a potential bullish resurgence in the near future, albeit amid market uncertainties and corrective phases. Investors and enthusiasts keen on XRP’s performance are advised to closely monitor these market dynamics to navigate through the volatility and make informed decisions.
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