A number of technical and fundamental indicators, as well as the feelings of social media retailers, show that the price of Ripple could fall by as much as 30% after jumping 8% last week.
According to the Kevin Telegraph, there is a risk that the price of Ripple will fall by more than 25% in the coming weeks. The several-month downtrend and the fear of oversupply of XRP tokens on the market are among the factors that threaten this digital currency.
After the price of Ripple reached its second historic peak in April 2021 ($ 98.98), the price of this digital currency has always stabilized in a downward triangular pattern.
As you can see in the chart below, Ripple has reached several peaks several times since then (the downward trend line in the right triangle model) and at the same time has established strong support around $ 0.55 (Is the horizontal trend line in the right triangle is model).
In the week ending March 13, Ripple hit the roof of this downward triangle again. Now a number of traders have warned that the digital currency may re-adjust and reach support for the model close to $ 0.55. This means that the price of Ripple can continue to fall by 25 to 30%.
Other indicators and downward trends, created in parallel with this downward triangle, feed Ripple’s downward trend.
For example, we can refer to Kendall’s model of the “descending hammer”, which was created on March 12 (March 21) in the Ripple chart. The descending hammer model consists of a candlestick that has a small body and a long high shadow. The hammer shows that the buying pressure of this digital currency is declining around the $ 0.85 level.
In addition, the price of Ripple hit the resistance of the moving averages on the chart that day. This resistance was the intersection of the 20-week moving average (EMA) (green wave of the chart) and the 50-week moving average (red wave of the chart). As you can see, Ripple could not overcome the resistance.
The possibility of a drop in the price of Ripple was increased when Ripple Labs announced that it would safely lock 800 million Ripple tokens on a pre-determined schedule.
On March 3, the company transferred 100 million ripple tokens (worth $ 40 million) to portfolios in digital currency exchanges. Meanwhile, he keeps 700 million Ripple tokens (worth $ 550 million) in a safe. The incident sparked rumors that the company would deliver at least 200 million Ripple units. Ripple Labs is rumored to be offering this amount to fund Ripple’s operating costs, as well as to distribute Ripple to the company’s customers around the world.
The fear of retailers and the increase in sales pressure due to the unexpected increase in the supply of Ripple tokens is not unprecedented. For example, after Ripple’s net supply rose from $ 40.46 billion to more than $ 47 billion in just two days, the price of digital currency fell 50 percent in four months to $ 0.60.
However, the 800 million units that Ripple Labs took and concluded are not yet reflected in its net supply.
Another factor that shows that the price of Ripple can fall by 25 to 30% is the data of the Santiment platform. This platform examines the trend of the feelings of traders in social networks and its impact on market trends.
Centim said the price of Ripple had risen by more than 15% by the week ending March 12 (March 21), and the amount of search on social media for the hashtag “XRPNetwork” had increased during that period. This shows that in the future the pressure to sell to traders of this digital currency may increase.
History has shown that as demand for the XRPNetwork hashtag increases, more retailers are thinking of leaving the market (selling).
The publication 3 reasons for the 30% drop in Ripple prices over the next two weeks first appeared in Arzdigital.