Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The market structure remained bullish, although $0.58 has halted the bullish progress.
- A fall below $0.5 would accelerate an XRP retracement.
XRP bulls have been jubilant in the last few days following a breakout past the $0.42 level of resistance. The high MVRV scores and daily transaction volume in profit to loss noted in a recent report indicated that a pullback was imminent.
Read XRP’s Price Prediction 2023-24
The optimism surrounding the XRP-SEC verdict fueled bullishness, and investors hoped for further gains. While this was possible, there was also the chance that the market could be overextended and hence traders can wait for a corrective wave.
The breakout and retest were clean and bulls could have some more ammo in their arsenal
The former range that XRP traded within was plotted in yellow and extended from $0.33 to $0.42. On 23 and 24 March, XRP retested these range highs as support before skyrocketing northward on the price charts.
The successful retest of the $0.41-$0.42 region as support was pivotal because this has not happened since November 2022. The previous attempt in late January was met with a failed breakout. XRP bulls were unable to sustain the upward run, and bears succeeded in slowly pushing XRP back to $0.35 in mid-March.
The $0.58 level was critical because XRP had tested it as support in January and May of 2022. Both tests saw a positive reaction, although the fear back in May 2022 quickly consumed the bulls and drove XRP to $0.3.
Is your portfolio green? Check the XRP Profit Calculator
The RSI stood at 64 to show strong bullish sentiment in the market, while the OBV registered massive gains to show the enormous buying pressure in recent days. Both indicators suggested more gains were likely to follow, but the importance of $0.58 has already been touched upon.
To the south, the $0.48-$0.5 zone had been crucial back in September-November last year, and even rejected the first XRP breakout on 22 March. Hence a retest of this region as support could offer buying opportunities.
The Open Interest showed muted bulls after the rejection
The 1-hour chart showed the Open Interest fell from $715m to $562m when XRP pulled back from $0.58 to $0.525 on the price charts within 12 hours.
This showed that bullish sentiment was weakened. The market structure remained bullish on the 4-hour timeframe but a slump below $0.5 could encourage bears to push XRP all the way down to the $0.42 support.
The liquidation data showed both long and short positions of a noticeable size were wrecked over the past two days. Combined with the recent rally, it highlighted that the market was in a dangerous spot for both buyers and sellers. Hence, bulls can wait for a retest of $0.5 or even $0.42 before re-assessing the market.