The cryptocurrency market, known for its volatility, has recently seen Ripple's XRP experience a notable downturn. As of November 17, XRP's price hovered around $0.60, marking a nearly 9.5% decrease week-to-date, including a 7.5% decline in just 24 hours. This trend, while reflective of the broader crypto market's behavior, shows XRP underperforming compared to its peers.
A significant factor contributing to this downturn was the rumor of a BlackRock exchange-traded product (ETF) centered around XRP. This speculation, which emerged on November 13, initially drove XRP's price up by 12% to approximately $0.75. However, the rumor was later debunked by Bloomberg's ETF analyst Eric Balchunas, leading to a swift collapse back to its initial value. This pump-and-dump event resulted in significant liquidations, particularly impacting long position holders. The derivatives market saw long liquidations worth $17.5 million between November 13 and 14, in stark contrast to only $2.87 million worth of short positions liquidated.
Another element impacting XRP's market dynamics is the distribution activity among its largest holders. Post the BlackRock ETF rumor, there has been a modest drop in the supply held by addresses with balances between 100,000 and 100 million XRP, while the 100 million-1 billion XRP balance cohort saw a slight increase.
Technical analysis also plays a role in the recent price behavior of XRP. The cryptocurrency experienced a pullback after testing a historical resistance trendline near $0.75. This decline is part of a correction that started around November 6, when XRP's daily relative strength index (RSI) reached its highest level since July 2023, indicating an overbought condition typically preceding selloffs.
Despite these challenges, the overall outlook for XRP isn't necessarily bleak. The price movement so far appears to be a typical correction within a bull market, suggesting that the general uptrend could resume. However, from a technical standpoint, XRP now faces the risk of declining towards the lower trendline near $0.50, an 18.5% drop from current levels. This $0.50 target aligns with XRP's 50-week and 200-week exponential moving averages (EMAs) and has historically served as a support level.
In contrast, a decisive breakout above the current resistance near $0.75 could set XRP's price en route to $1.13 in 2023 or early 2024, a more than 80% increase from its current price.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.