XRP market Analysis: 01 January 2021

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Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice

XRP, a cryptocurrency that was once contending for the 2nd position of CoinMarketCap’s charts with Ethereum, has now slipped down to 4th on the rankings, a slide that might just continue in the near-term. While nobody expected the SEC’s lawsuit against Ripple and XRP, we all knew that it was also inevitable.

At the time of writing, XRP had dropped by 16.3% in the last week alone, on the back of a 72% fall in the last 35 days. Although this drop will continue, let’s take a look at XRP’s price and find out what we can expect.

XRP 1-week chart

Source: XRPUSD on TradingView

The attached chart highlights XRP’s price performance from a different perspective.

Except for XRP’s recent surge to $0.79, the cryptocurrency has traded sideways for most of 2020, starting from mid-2019. Focusing on 2020, let’s take a look at how XRP performed.

  1. Considering the $0.79 surge, XRP’s returns stood at 181% on 23 November, however, at press time, XRP’s YTD returns stood at a measly 0.46%
  2. Another interesting observation is that out of the year’s 365 days, XRP has below $0.30 for 313 days
  3. Similarly, XRP has traded below $0.40 for 333 days
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With these observations, we can easily conclude that XRP was dead long before the SEC filed the lawsuit. As a speculative asset for trading, XRP didn’t offer much as its price always stayed grounded, but with the SEC’s lawsuit, speculative trading in XRP has disappeared, at least in the U.S.

At the time of writing, except Kraken, every major crypto-exchange had bid adieu to XRP, something that explains, in part, the reason for XRP’s price drop. If Kraken does the same, we can expect the price to drop even more.

Conclusion

Source: XRPUSD on TradingView

The attached chart highlights one important trendline at $0.1140. This level was tapped in 2020 and if XRP visits this level again, we can assume that it has hit a point of no return. Right now, one can argue that almost all XRP hodlers have abandoned ship or are in the process of doing so.

Finally, any observation of the cryptocurrency’s indicators is pointless since the only direction XRP will be going in is down.

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