Beleaguered token XRP has extended its steep decline since early January, now risking a breakdown of the pivotal $0.50 support level. Already down 14% in the past day to $0.51, the selloff reflects both damaging news and increasingly bearish market technicals.
- XRP price has dropped 14% to around $0.50, partly due to dashed hopes of a BlackRock spot XRP ETF after the firm denied plans.
- Data shows large XRP holders have actively sold or redistributed tokens, adding sell-side pressure.
- XRP is testing support around the $0.50 level, with a close below that risking a drop toward $0.35 major support.
- The price has formed a descending trendline that has turned price action lower on recent tests, signaling ongoing bearishness.
- Technicals like the RSI suggest oversold conditions which could attract bargain buyers to spark a relief rally, but upside obstacles persist.
Much of the negative sentiment ties back to crushed hopes for a spot XRP exchange-traded fund (ETF) offering exposure to the token for mainstream investors. Earlier hype around comments from BlackRock CEO Larry Fink alluding to “not being able to talk” about XRP products was firmly denied last week.
— Charles Gasparino (@CGasparino) January 18, 2024
With the world’s largest asset manager confirming no near-term XRP ETF plans, the speculative fervor fizzled out. The clarification contributed to XRP shedding 10% over the following days.
On-chain data also indicates sustained selling pressure from prominent holders. Analytics provider Santiment tracked a notable decrease in supply held by addresses holding between 100 million to 1 billion XRP tokens.
That reduction coincided with rising balances for investors owning 10 million to 100 million coins – evidence that large holders are actively distributing XRP. The cohort’s actions reflect bearish sentiment and add significant sell-side weight.
Technically, XRP has formed a descending trendline in place since its September highs. Recent touches of the line, like on November 13th, have precipitated sharp declines as large holders distribute. XRP has plunged 33% since that peak test.
Currently, XRP navigates the make-or-break $0.50 support level that has marked bullish trend changes in the past. But based on current strong bearish signals, the odds favor an imminent breakdown that leaves $0.35 as the next major floor.
Making matters worse, the relative strength index (RSI) shows oversold conditions while XRP trades firmly beneath its 50-day and 200-day moving averages. While those factors could inspire bargain buying to generate some upside, significant resistance around $0.56 and $0.59 stand in the way first.
While oversold XRP may see speculators trying to call a bottom, the aggregate signals from indicators, large holder behavior, and crucial technical support levels all warn of continued downside risk. Only a daily close above $0.56 resistance would provide evidence bulls are wresting back control.