XRP, the cryptocurrency associated with Ripple, faced a tumultuous ride in recent weeks as its price witnessed a significant downturn. However, an interesting turn of events has unfolded as the coin found solace at a crucial support trendline coinciding with the psychological level of $0.5.
This fortuitous alignment has offered XRP bulls a potential launching pad for a counteroffensive, raising questions about the possibility of a recovery.
The value of XRP soared after a groundbreaking legal verdict that classified the token as not being a security in the protracted legal feud involving Ripple and the US Securities and Exchange Commission. This decision initially propelled XRP to higher valuation grounds, signaling optimism among investors.
XRP price action today. Source: Coingecko
However, the enthusiasm proved to be short-lived as the cryptocurrency faced a noticeable drainage of capital. As of the latest available data, XRP’s market capitalization stands at $28.26 billion, witnessing a decline of $14.63 billion since the post-SEC ruling peak of $42.89 billion on July 14.
Boosted By Legal Victory, Subdued By Capital Outflow
The decline in XRP’s market capitalization can be attributed to an amalgamation of influences. Notably, traders who benefited from the initial surge in prices opted to take profits, inducing a downward pressure on the coin’s value.
The inherent volatility of the cryptocurrency market also played a role in amplifying these fluctuations. Additionally, lingering apprehensions surrounding the regulatory outlook of XRP’s long-term status added to the uncertainty, potentially dissuading potential buyers from committing to the coin.
XRP reached a market cap of $27.6 billion today. Chart: TradingView.com
XRP: Path To Recovery
As the market assesses the course ahead for XRP, technical analysis offers insights into potential inflection points. To dismantle the impact of the previous price breakdown, buyers are looking to breach the $0.5948 high achieved on August 17.
Such a breakthrough would disarm sellers and could provide the momentum needed to drive the price toward recovery. In this scenario, with the current price of XRP at $0.534, XRP’s journey could see a resurgence towards $0.667, followed by aspirational targets of $0.854 and $0.933.
XRP seven-day price action. Source: CoinMarketCap
XRP’s recent price trajectory has been marked by oscillating sentiments, ranging from elation due to a favorable legal outcome to a subsequent exodus of investment capital.
However, the cryptocurrency appears to have found a stabilizing foothold as it aligns with a crucial support trendline at the $0.5 psychological level.
The market’s focus now shifts to the battle between buyers and sellers, as investors watch for a potential rebound from the recent dip.
(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).
Featured image from CryptoTicker
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