- XRP continues to be highly correlated to Bitcoin.
- XRP is currently being held in the crypto markets by the crucial $0.17 support zone.
- This area is at risk of collapsing with a sub $9,000 Bitcoin.
- XRP’s woes could continue as it has had a hard time recovering from the Coronavirus crash of mid-March.
A quick glance of the top five digital assets on Coinmarketcap reveals that Tether (USDT) has firmly taken the number three spot from XRP. Back in mid-May, the two digital assets were neck and neck fighting for the number 3 spot.
Back then, XRP needed to be valued at $0.20 to edge out Tether. However, with the marketcap of USDT continually increasing with the high demand for stablecoins, XRP will need much more fuel to eclipse Tether’s $9.1 Billion marketcap compared to its own at $7.8 Billion.
XRP is Highly Correlated to Bitcoin
Furthermore, the fate of XRP is very much tied with that of Bitcoin. It is a known fact in the crypto-verse that the direction of BTC dictates the rest of the major digital assets. In this case, the correlation of XRP and BTC is high as ever (0.87) as illustrated by the chart below courtesy of Coinmetrics.
XRP Could Lose Crucial $0.17 Support with a sub $9k Bitcoin
This, in turn, means that any drastic drop by Bitcoin will have a ripple effect on XRP. Bitcoin is currently oscillating within a tighter range of $$9,124 and $8,900 which means that a major move is getting closer. All analysis points to a dip by Bitcoin and such a move could cause XRP to lose the crucial support zone of $0.17.
Revisiting the daily XRP/USD chart, the following can be observed.
- XRP/USDT is still in the earlier mentioned falling wedge.
- $0.17 provides solid support for XRP.
- XRP’s current price at $0.1777 is below the 50-day, 100-day and 200-day moving averages thus painting a bleak picture for the digital asset.
- A break in this level could open the doors to a retest of the lower support of $0.11.
- Daily trade volume has reduced further hinting at a dip by XRP.
- However, MACD is showing signs of bullishness with a potential bullish cross in the pipeline.
- MFI is also bullish at 30.
The fate of XRP in the crypto markets looks bleak as the fate of digital asset is tied at the hip with Bitcoin. This means that any drastic drop of BTC will lead to XRP losing the currently crucial support zone of $0.17. XRP has also had a hard time recovering from the Coronavirus crash of mid-March. According to the team at Arcane Research, XRP has seen a relatively flat Q2 when compared to Bitcoin and Ethereum. This could point to a reduced interest in XRP and could lead to further losses for the remittance coin.
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of EWN or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.