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The XRP price rally triggered a 65% crash last time the stalls near the main level

The ongoing inverted retracement of the XRP causes exhaustion because it tests the level of resistance with a history of triggering a 65% price decline.

XRP rebates 30% of the price

XRP’s price gained nearly 30%, to $ 0.36 on June 24, rebounding from $ 0.28 four days later, its lowest level since January 2021.

According to its “cup and handle” model shown in the chart below, the token’s retracement rally can be extended to the next $ 0.41.

XRP / USD four-hour price chart featuring the “cup and handle” model. Source: Trading View

Interestingly, the gain target of the indicator is similar to the 50-day exponential moving average of the XRP (50-day EMA; red wave).

The XRP / USD daily price chart includes a 50-day EMA upside target. Source: Trading View

Major resistance obstruction

The Cup and Handle bullish reversal setup meets its profit target at a 61% success rate, according to veteran analyst Thomas Bolkowski.

But XRP’s case falls on the 39% failure spectrum because of its technical signal of conflict presented by its 200-4H exponential moving average (EMA).

XRP’s 200-4H EMA (blue wave in the chart below) has previously served as a strong delivery signal. Significantly, in April 2022, the token attempted to break the alleged wave resistance several times, only to face denials in each attempt; It then fell 65% to $ 0.28.

XRP / USD Four-Hour Price Chart Containing 200-4H EMA Resistance. Source: Trading View

On June 23, the XRP 200-4H EMA stalled in the midst of an ongoing cup-and-handle breakout after being re-examined. Now, the token is awaiting further partisan confirmation and is facing the risk of a price drop just as it happened after April.

XRP’s over-bought Relative Strength Index (RSI), which is now above 70, increases the likelihood of an intermediate price correction.

The XRP LTF breakdown is underway

The downside of XRP’s short-term chart is that it comes in line with giant bearish setups on its long-term chart.

As Cointelegraph closed earlier, XRP has entered the stagnation phase after exiting its “descending triangle” structure in early May.

As a rule of technical analysis, its triangular decomposition must fall to the maximum height of the structure, which places its distress target near $ 1.86.

The XRP / USD weekly price chart includes the ‘Descending Triangle’ setup. Source: Trading View

In other words, another 50% price drop for XRP could occur by the end of July this year.

The macro risks led by the Federal Reserve’s hawkish policy further reinforce XRP’s bear bias. The XRP / USD pair will generally trade lower with risky assets in 2022, with a correlation coefficient of 0.90 as of June 24 with the Nasdaq Composite.

XRP / USD weekly relationship with NASDAQ. Source: Trading View

A score of 1 means that two assets move in perfect sync.

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By contrast, prospects that Ripple wins a lawsuit filed by the US Securities and Exchange Commission (SEC) for allegedly “selling” unregistered securities may negate bearings.

In fact, XRP may rebound to $ 0.91 by the end of this year if ongoing retracement continues. Interestingly, the token bounces after testing long-term trendline support as shown below.

XRP / USD weekly price chart. Source: Trading View

The bounce also saw XRP’s weekly Relative Strength Index (RSI) fall below 30 – the over-selling limit, which indicates a potential buying opportunity.

The opinions and opinions expressed herein are those of the authors and do not necessarily reflect the opinions of Cointelegraph.com. Every investment and business move involves risk, you must conduct your own research when making a decision.