Ripple Price Prediction: XRP consolidates following airdrop-fueled crash
Daily Ripple XRP Technical Analysis
- December 12’s SPARK airdrop has harmed XRP’s price action.
- The 4-hour price chart shows that Ripple is bundled below 20-bar, 50-bar, 200-bar SMA.
For weeks leading into the much-hyped December 12 Spark airdrop, analysts have speculated about how it could affect Ripple’s price action. Well, it turns out that the airdrop has had an immensely negative impact on the price as the cross-border remittance token crashed from $0.57 to $0.50.
Ripple trends inside 14-day old downward channel
Since November 25, XRP has been trending inside a downwards channel formation, falling below the 20-day SMA. This downtrend followed an extremely bullish November. In the first three weeks of November, XRP surged by 280% from $0.2415 to reach intraday highs of $0.921.
The price has dipped below the 20-day SMA, as the MACD shows increasing bearish market momentum. In the past four days, the price dropped from $0.575 to $0.50.
Why did XRP correct itself following the airdrop?
Ripple faced a massive demand prior to the airdrop, with the investors quickly buying up chunks of XRP to position themselves more favourably. Since December 9, XRP saw 10%-20% movements within a few hours, causing periods of extremely high volatility. Analyst Joseph Young noted that cryptos consolidated after a period of high volatility since the derivatives market tends to cool down.
“When a futures market’s open interest drops substantially, which is the total sum of all active open positions, it takes time for the asset to see renewed momentum. In the foreseeable future, this raises the probability of a low-volatile consolidation phase for the XRP price.”
Short-term price action muted by strong levels
Looking at timeframes <1 day helps us identify the short-term price targets.
Image: XRP/USD 4-hour chart
As you can see, XRP is bundled underneath the 20-bar, 50-bar, and 200-bar SMA, which is preventing the price from enjoying positive surges.
Investment Icon heaps praise on XRP
Popular investor and founder of Edelman Financial Engines, Ric Edelman, has said that he’s a cryptocurrency enthusiast and investor. Edelman Financial Engines currently has over $200 billion in assets under management (AUM).
In a recent interview with Real Vision, Edelman said that he began to tinker with digital assets in 2014 as an experiment. With time and interactions with many experts in the cryptocurrency space, he realized that this sector has a lot of potential and “is not just a Beanie Baby.”
Edelman said that he has since grown his portfolio and invested in Ethereum. He believes that XRP could play a key role in a cryptocurrency revolution.
The popular investor noted that several altcoins (such as XRP) exist because they solve a problem that the others were facing - “Bitcoin is not the end-all solution.” Edelman warned that many altcoins are destined for obscurity and that he has no plans to mine BTC due to the complexity involved.
“It has a huge head start. 70% market share on a brand that none of the others have, but there is a reason technologically for the existence of these other coins. A lot of them are nonsense, but some of them make sense. Recognizing the cumbersome element of buying coins themselves, I chose personally not to engage in mining, too time-consuming. I am too busy in my day job with Edelman Financial Engines. I am not going to go there.”
Key price levels from XRP
The bulls will need to keep an eye out for the lower level of the downward channel ($0.453) to prevent further downtrend. On the upside, the buyers have to flip the 50-day SMA ($0.584) from resistance to support to move into the $0.60-zone.