The year 2023 started with a hope of a bullish rally, with prices of cryptos bouncing back after the 2022 bloodbath. But, several macroeconomic factors have hit the crypto market again over the past few weeks, and there has been a significant decline in the prices of assets.
With the final verdict of a long-going lawsuit nearing an end, 2023 is a significant year for XRP. However, the crypto has been in a downtrend for the last few weeks, and investors are curious to know if its price can bounce back soon. On a positive note, regardless of all the challenges, some experts still believe in the bullish outlook of XRP in the long term.
What Is Happening Within The Crypto Market - An Overview
The crypto market is going through a rather slumber week, given the worsening economic conditions and regulatory pressure from US agencies. The collapse of Silvergate bank earlier this month has brought back the fear of the FTX exchange implosion for investors.
Additionally, several stablecoins are also trading through a rough path. Circle’s USDC stablecoin is plunging and significantly deviating from its dollar peg. This is the aftermath of the collapse of another banking giant, SVB Financial Group. With the news spreading across, investors are recalling the Terra USD crash of May 2022 and the bloodbath that followed it.
With all these looming fears across the market, the possibility of a weekend sell-off cannot be completely ignored. However, a tweet from Wu Blockchain explains that the actual risks exposed are merely a small number of funds.
Ranking of funds involving SVB. Gross asset value may refer to the total size of the entrusted funds, and the actual risk exposure may only be a small amount of funds. According to @FinanceYF5 https://t.co/FRO4la2UuA pic.twitter.com/aYnM7cpKyf— Wu Blockchain (@WuBlockchain) March 11, 2023
Having said that, it is mandatory for investors to closely watch the news around USDC and SVB in the coming days, as the crypto market’s momentum would be majorly driven by these events.
XRP Price Needs This Support to Bounce Back
XRP price has been moving in a descending tunnel over the past few weeks. It has reached a highly crucial support level that could predict its next move. Analysts say that if XRP breaks the support level, it could further plummet into a steep downtrend. But if the asset bounces off this level, the prices could again skyrocket to new highs.
The bullish rally of January 2023 has pushed the XRP price to hover slightly above $0.40. But then the bears took over in early February. However, it is currently trading at $0.3707, which is a relatively stable range.
Analysis of XRP’s September 2022 price shows its upper point of control at $0.50 and the point of control on the downside at $0.30. In addition, it lost its fire during the upswing in January, right after meeting its multi-month trend line, pulled from September’s high of $0.56.
XRP/USD daily chart
Considering its current price and the unfavorable market scenario, an immediate bounce back would be a far-fetched dream for XRP. The crypto is under immense pressure as it is trying to maintain its support level. It is now below all the major applied moving averages, like the 200-day Exponential Moving Average (EMA) line in purple, the 100-day EMA line in blue, and the 50-day EMA line in red.
The next tentative support level could be due to the buyer congestion at $0.35, and maintaining this level is highly crucial for an immediate bounce back. If the price plunges below $0.30, two outcomes can be expected; one, XRP price would take advantage of the new liquidity and strongly push for a trend reversal, and two, trading below the support level could trigger another massive sell-off.
Why Declines in XRP Price Are Unstoppable
Analysts say that declines below $.30 might be unstoppable until the price reaches $0.25. However, all the technical indicators in this analytic chart offer a dull picture of the XRP price. Starting from the Moving Average Convergence Divergence (MACD) indicator shows a vivid sell signal as of March 9. Now, it is holding below the mean line at 0.00 and exploring the negative region. If the support level of $0.35 breaks up, XRP would have no option but to hold on to its next level at $0.30.
XRP/USD four-hour bearish setup
On the other hand, the position of the Money Flow Index (MFI) generally shows that a spike in trading volume comes from selling activities. For now, the XRP price lacks the momentum and liquidity to reverse the trend. Those investors who are seeking to get a hold of XRP for the long term should wait until the token confirms the support level and the price bounces back.
Can XRP Price Bounce Back?
XRP, one of the most promising altcoins in the market, is hanging at the edge of a cliff today due to all the uncertainties within the market. Crypto whales have started accumulating XRP since February, resulting in a spike in the trading volume of Ripple. The main catalyst that can drive XRP to new highs is the positive results in the legal proceedings with SEC. The growth driver of current hale accumulation is certainly the positive developments in the Ripple v/s SEC lawsuit. The crypto has found strong support from popular firms and lawyers, including Paradigm Operations LP and Lewis Rinaudo Cohen.
XRP price can significantly bounce back if Ripple wins the lawsuit against the SEC. This could lead to a surge in demand and value of the asset, making it the top investment option, given its strong following and potential use cases in the financial industry.