The XRP price has crashed into a crucial support level where it has failed to move below several times since December last year.
Summary
- XRP price has plunged to a crucial support level.
- The decline is primarily because of the ongoing crypto market crash.
- XRP sits at a crucial support level ahead of key ETF approvals.
Ripple (XRP) token dropped to a low of $1.8430, down by 47% from its highest level this year. This crash has seen its market capitalization drop to $115 billion from the year-to-date high of nearly $200 billion.
The ongoing XRP price crash has coincided with the performance of the broader crypto industry, where Bitcoin (BTC) and most altcoins have shed over $1.2 trillion in value.
Still, XRP has some major catalysts that may help to spark a turnaround. The most important one is that there is a resilient demand for XRP among American investors.
SoSoValue data shows that XRP ETFs have attracted inflows in each day since their approval. Canary and Bitwise XRP ETFs have had $422 million in inflows and $384 million in net assets, which is equivalent to 0.33% of the market cap.
The ongoing inflow trajectory will likely escalate in the coming weeks as other ETFs by companies like Franklin Templeton and Grayscale come online.
Bitcoin and Ethereum ETFs account for between 5% and 6.5% of their respective market capitalizations. Assuming that XRP ETFs will have just 5%, it means that their net assets could rise to over $5.7 billion.
There are other potential catalysts for the XRP price, including the ongoing momentum in the Ripple USD stablecoin. It recently crossed the $1 billion market cap level, with over $300 million of these being in the XRP ledger. This growth will likely accelerate in the future.
The amount of leverage has also dropped, with the futures open interest falling to $3.3 billion from over $10 billion a few months ago. This sets the stage for a potential steady increase in the coming months.
XRP price technical analysis
The three-day chart shows that the XRP price has slumped in the past few months. It has now settled at an important level, which is possibly its make-or-break point. It has failed to move below this price several times in the past few months.
Ripple price has moved below the 50% Fibonacci Retracement level. It also dropped below the 50-day and 100-day Exponential Moving Averages.
Therefore, a drop below the support level at $1.8430 will be a red flag as it will confirm the double-top pattern at $3.4072. Such a move will risk it falling to $1.50. On the other hand, a rebound to the psychological point at $2.50 is possible if this support holds.