Ripple Price Prediction: XRP Again Crashes After Failing At 20-day SMA

Daily Ripple XRP Technical Analysis

Last Updated July 23rd 2021
3 Min Read
  • Ripple price volatility is decreasing in the daily chart.
  • XRP needs to break 20-bar SMA to flip the parabolic SAR from negative to positive.
  • Since June 4, the Ripple price crashed from $1.04 to $0.86. During this crash, XRP has met continuous resistance at the 20-day SMA. Prior to this, XRP has hovering horizontally around the $1.04 level for three straight days (June 1 to June 3) prior to this crash. Let’s take a closer look with technical analysis.

    Ripple Price Volatility Going Down

    The relative strength index (RSI) shows that the Ripple price may drop some more before it becomes officially oversold. The Bollinger Band has started constricting, which shows that the overall volatility has been decreasing. As things stand, XRP is dropping towards the $0.80 support line.

    Image: XRP/USD daily

    XRP/USD daily chart 061021

    In the 4-hour time frame, the Ripple price failed at the 50-bar SMA and dropped from $0.96 to the $0.80 support wall. Following that, the buyers have managed to push up XRP, but it’s currently hovering around $0.865 below the 20-bar SMA. If Ripple manages to break past this level, it will flip the parabolic SAR from negative to positive.

    Image: XRP/USD 4-hour

    XRP/USD 4-hour chart 061021

    Ripple’s A New Strategy That Will “Strikingly Advance” XRP

    Ripple recently published a proposal to include federated sidechains connected to the XRP Ledger (XRPL). The idea is that each sidechain would operate as its own blockchain, helping preserve the XRPL’s leanness and efficiency for cross-border payments.

    In a blog post, Ripple CTO David Schwartz said that developers contributing to the XRP network have been requesting the smart contract feature because of the flourishing DeFi sector. But for Ripple execs, maintaining the high efficiency of the XRP ledger is important. As such, he has proposed federated sidechains that will allow developers to implement new features while keeping the ledger secure and efficient.

    The sidechains will have their ledger and transactions just like the XRPL., meaning that the sidechains will expand the functionality of the XRP ecosystem by providing interoperability for native smart contracts and other important use cases by using the federator software.

    David Schwartz added that Ripple would have to make two small changes to the operation of the XRP mainnet to integrate the federator software strategy. Ripple will also be required to add new features to the XRPL server software to allow it to operate in a sidechain. However, these features would not be enabled on the XRP Ledger itself.

    Notably, this particular federator software will allow anyone to run a sidechain to the XRP mainnet. It will be connected to the XRPL and one or more sidechains. Furthermore, the sidechains can use their native asset or use XRP. Schwartz also posited that the federator software will allow the movement of XRP and issued tokens from one chain to another. 

    As for who is eligible to run the federator software, Schwartz opined that it would only be participants that operate validators on at least one sidechain. He further said that each of the sidechains would have a “trust account” on the XRP Ledger, adding:

    “This account can hold assets on the XRPL on behalf of users of the sidechain. The account would use a multisign or threshold key, with the signers being the validators of the sidechain. Each sidechain validator operator registers a signing key that signs transactions on XRPL; thus, the validators of the sidechain can collectively create transactions to manage the sidechain’s Mainnet account.”

    Ripple Price Is Expected To Reach These Levels

    The Ripple price will likely drop to the $0.80 support wall. If this support barrier breaks, XRP will fall to the 200-day SMA ($0.71).