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How low can Ripple go? A fall back to technical analysis for perspective

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In the past 12 hours, XRP (XRP) has dropped by over 18% and is now trading at around $0.35. This follows bitcoin’s break below $4000, a break that drove up bearish sentiment, and pushed it to around $3600.  With such strong bearish sentiment, it is rational to consider the worst case scenario for different coins. Clearly, many of those with weak fundamentals are going to zero, and probably won’t be coming back. But for cryptos with solid fundamentals such as XRP, there is a future.

Therefore, the big question now is, what’s the worst-case scenario for XRP under current market conditions?  To have a rough idea of how low it can go, the best approach is to use technical analysis. It is the best measure of market sentiment in the perpetual battle for control between bulls and bears.

From a look at the XRP long-term charts, there is room for some more downside moves.  There are two possible support levels for XRP at this point. The first one is $0.244. This is the lowest price that XRP has traded at in 2018 and from which, it made a major reversal all the way to $0.80. There is a probability that it could support the price of XRP in the short-term. In the unfortunate scenario that it doesn’t hold, then it could open the floodgates for sellers, both those shorting the market and those selling out of panic. This could possibly drive the price of XRP to as low as $0.154.

This is XRP’s October 2017 price, and it could possibly mark the end of the bloodbath. If XRP were to test this price, then the risk of any further downside slides would be significantly reduced. Not that there are guarantees, but there would be a higher probability of a prolonged consolidation with minimal volumes, as opposed to a freefall below $0.10.

The probability of XRP dropping to $0.15 is largely tied to bitcoin (BTC)’s price action, and it’s not looking great. Bitcoin’s long-term chart shows a crypto that is racing towards $3175, which is a key long-term support and could drag the rest of the market with it.

If bitcoin breaches $3100 then it will have broken market structure, and there would be a risk of a multi-year stagnation between $1500 and $2500. That’s fully in line with the above possibility of XRP entering a long-term consolidation phase if it drops below $0.15.

There is hope

It’s not all doom though. Markets do the unexpected all the time. All it would take is some positive news, possibly from regulators and the market could experience a major reversal. With lots of institutions getting involved in crypto, such a possibility exists.  Nevertheless, it is best to keep an eye on the market and with an open mind. Markets are never 100% predictable and anything can happen at any time. That’s why the most important tip in investing is to invest what one can afford to lose. That and having a long-term picture of the markets. This helps take away emotions and keep a firm eye on the goal. There is no doubt that long-term, blockchain is the future.

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