Ripple Price Forecast: XRP Rejection from $0.92 Risks Extended Declines
- Ripple hunts for support toward $0.78 after hitting the barrier at $0.92.
- A descending triangle pattern hints at a potentially massive breakdown to $0.48.
Ripple sluggish price action continues despite the bulls' effort to reclaim higher ground. Earlier this week, Ripple dumped to $0.78 amid a general cryptocurrency market selloff. However, more buyers rushed to pull the cross-border token above $0.8. The bullish leg stretched above $0.9, but the elastic limit broke at $0.92.
At the time of writing, XRP explored levels under $0.9 again, with a prevailing market value of $0.86. Generally, the market outlook is bearish based on short-term technical indicators.
Ripple's technical outlook could trigger another downslide
The Relative Strength Index (RSI) has a bearish vivid bearish outlook, as observed on the chart. After the recovery from the oversold area, the RSI failed to make progress above 40; thus, the midline was never tested. A retreat from this level is heading quickly to the oversold zone, thus propping the downside further.
XRP/USD four-hour chart
A comprehensive look at the four-hour chart brings to light a descending triangle. The pattern is considered highly bearish in technical analysis. It is formed using two converging trend lines, linking descending highs and relatively equal troughs.
As the Ripple forms a lower high pattern, sellers are growing their presence in the market. On the downside, the horizontal line (x-axis) represents formidable support. As the trend lines meet, it suggests XRP is consolidating, and low trading volumes characterize this stage.
Realize that a breakout is expected before the lines converge. Slicing through the x-axis marks the beginning of a downtrend. A spike in volume accompanies the downswing, as Ripple drops toward the 38% target at $0.48.
The network growth model by Santiment affirms the bearish narrative as illustrated in the chart below. Note that the number of addresses joining the XRP Ledger has been slopping massive in the last 30 days. From a high of 7,920, the addresses created on the protocol currently hold at 3,000.
Ripple network growth chart
Low network growth is a bearish signal and tends to pull down recovery attempts. Keep in mind that a decrease in the number of addresses joining the network affects the regular inflow and outflow of tokens. The project's adoption is also negatively impacted.
If support at $0.8 holds, XRP may invalidate the impending breakdown. As stability returns to the market, XRP is bound to lift above $0.9. However, only a confirmed break past $1 will bring Ripple out of the woods and set on a formidable recovery path.