Ripple, one of the leading cryptocurrencies, experienced a significant loss in gains after a federal court ruling in July. The price of the XRP token had surged from the $0.4 range to nearly $1 following news that it was not considered a security. This led to widespread excitement among crypto investors, and it seemed impossible to find a bearish trader.
However, the excitement was short-lived. The Security and Exchange Commission (SEC) announced its intention to appeal the federal court ruling in Ripple’s case. This news prompted investors to sell their holdings, causing the XRP/USD rate to plummet back to its pre-July levels. Ripple recently completed a full retracement of the gains it had made since the announcement.
From a technical analysis perspective, there are both bullish and bearish scenarios for Ripple. However, the most significant observation is that Ripple is currently stuck within a range and has been unable to break above or below major resistance and support levels.
On the bullish side, Ripple’s price surged to over $1.8 in 2021 as investors sought exposure to cryptocurrencies during the COVID-19 pandemic. However, sellers quickly emerged, and a bearish triangle pattern formed. This consolidation held until 2022 when Ripple’s price broke lower, violating support provided by the lower edge of the triangle. Since then, Ripple has struggled to regain its footing.
Despite the recent rejection, there is still a bullish case to be made for Ripple. The $0.3 area acted as a significant support in 2022, and the market has been forming higher highs and higher lows since then. As long as Ripple holds above this support level, there is a chance for the price to recover and attempt to break and hold above dynamic resistance once again.
On the other hand, the recent selloff has shaken the confidence of many traders. Optimism waned, and capital fled from Ripple. If the price drops below $0.4, the momentum for further downside would build, potentially leading to a significant drop towards the major support area at $0.3. If this support level is breached, it may spell the end of the bullish sentiment that Ripple had enjoyed.
In conclusion, Ripple’s gains following the July federal court ruling have been completely erased. The cryptocurrency is now stuck within a range and has struggled to break major resistance or support levels. The outcome for Ripple remains uncertain, with both bullish and bearish scenarios plausible. Investors will be closely watching the major support area at $0.3 to determine the future direction of Ripple’s price.
