Ripple Crypto Currency Market as concept. Financial markets and virtual currency values 3D Illustration.
The Ripple price is under pressure as demand in the digital currency wanes. The XRP token is trading at $1.0756, which is about 25% below last week’s high of $1.4142. It has a total market capitalization of more than $49 billion and is the eighth biggest cryptocurrency in the world.
The recent performance of the XRP price is in line with the performance of other cryptocurrencies. In the past, we have seen the prices of key digital currencies like Ethereum, Bitcoin, and Cardano lose more than $300 billion of combined value. Historically, cryptocurrencies tend to move in tandem with Bitcoin.
There are several reasons behind the current price action in cryptocurrency prices. First, there is a possibility that investors are taking profits after the currencies added more than $800 billion worth of value in a matter of weeks. In most cases, financial assets tend to retreat after hitting a key level of resistance.
Second, investors are still selling the news on El Salvador. Last week, the country became the first one to accept BTC as legal tender. It backed its confidence in the currency buy buying BTC worth more than $20 million. In most cases, cryptocurrencies tend to drop after a major event. For example, they crashed soon after Coinbase went public.
Finally, they have dropped because of the relatively strong US dollar. The dollar index has been rising as investors price in a relatively hawkish Federal Reserve.
Meanwhile, investors are still focusing on the SEC vs Ripple Labs case. The SEC accuses Ripple Labs of raising a financial security without permission. Ripple Labs argues that XRP is a normal cryptocurrency like ETH or BTC.
A first glance at the daily chart shows that the XRP price is not doing well. For one, the coin formed a double-top pattern at around $1.3460. The neckline of this pattern was at $1.0480. It has also moved below the 25-day and 50-day moving average and is along the 50% Fibonacci retracement level. The coin has also formed what looks like a bearish flag pattern.
Therefore, the coin will likely break out lower as investors target the next key support at $0.8542, which is along the 23.6% Fibonacci retracement level. A move above the double-top at $1.3460 will invalidate this view.