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The global cryptocurrency market has had an interesting first half of 2021. The new year began with a rising Bitcoin, which eventually reached an all-time high of more than $60,000 in mid-May. Naturally, the action boosted practically all altcoins, as increased bullish mood boosted their value.
However, the broader market structure was badly damaged by the crypto-crash on May 19, and there were no convincing indicators of a positive turnaround at the time. The rise and fall of XRP has been fascinating in the midst of all of this. The cryptocurrency entered 2021 on the back of Ripple’s anticipated lawsuit with the US Securities and Exchange Commission, but it continued to rise in price over the next several months.
What’s more impressive is that, from January to April, its correlation with Bitcoin was only 0.38-0.20, implying that its profits were mostly independent of Bitcoin’s movement. As broader pessimistic sentiment eventually spilt over into the XRP market, the correlation coefficient has now been raised to 0.80.
At the time of writing, XRP was trading at $0.524, down 8% in the previous 24 hours.
XRP Daily Chart
Since its 33 percent drop on May 19, XRP has been flashing persistent bearish warnings. For the first time since the lawsuit was disclosed in late December, constant selling pressure brought its price below the 200-SMA (green) in late June. In fact, a death cross was shown on its daily chart, highlighting the market’s severe bearish conditions.
The alt’s price is already nearing its low of $0.509 set on June 22nd, and it remains vulnerable to a breakdown in the coming days. The Visible Range indicated a lot of interest in XRP between $0.458 and $0.430, and it could be XRP’s next stop if it continues to fall. Meanwhile, an immediate bullish response at $0.509 is required to disprove such a scenario.
The Relative Strength Index highlighted oversold conditions in the market. The index touched this zone in late June, a development that triggered a near 40% surge in value and bulls would be aiming at a similar outcome.
However, with selling pressure still high in the broader market, a trend reversal is still an uncertainty.As selling pressure increased, the Directional Movement Index’s -DI moved further away from the +DI. The Aroon indicator corroborated this as the Aroon up remained close to 0% while the Aroon down remained at 100%. This also marked a new low for the digital asset during the previous 25 trading periods.
If bulls fail to stop losses around $0.509, XRP remains vulnerable to another 15% -16% drop in value. The bulls would need to respond quickly at XRP’s press time support of $0.509 to prevent such a scenario from occuring. Meanwhile, once this crucial protection is breached, traders can elect to set up short transactions.