Earlier this past week, XRP shocked investors when it was able to post a double-digit rally that allowed it to reclaim its position within the $0.20 region. This rally came about after an extended period of trading around $0.19.
At the peak of this bull favoring movement, the embattled cryptocurrency was able to climb as high as $0.23, which is when it tapped a massive resistance region that sparked yet another downtrend.
Analysts are now noting that this downtrend could lead XRP to drop another 25% against Bitcoin, which could mean that it is in serious trouble.
XRP Continues Erasing Recent Gains as It Reaches Critical Support Level
At the time of writing, XRP is trading down over 4% at its current price of $0.206, which marks a notable decline from its daily highs of $0.215 that were set yesterday when bulls attempted to absorb the intense selling pressure it is currently facing.
The recent rejection it faced around $0.23 came about due to this being a strong resistance level, and it appears that the $0.20 has become a key support level, with a break below this potentially leading to significantly further losses.
“$XRP Dodged a bullet. Dumped just as quickly as it pumped,” Loma, a popular cryptocurrency analyst on Twitter explained while pointing to the levels seen on the chart below.
Dodged a bullet.
Dumped just as quickly as it pumped. pic.twitter.com/ELuDB0CPI7
— Loma (@LomahCrypto) January 8, 2020
Adding to the embattled token’s bearish price action is the sheer amount of controversy surrounding Ripple’s close ties to the token, with the fintech company’s quarterly token sales been widely viewed as a source of its immense downwards pressure.
As for where XRP may head next, this likely depends on whether or not bulls will be able to hold the cryptocurrency above $0.20 in the near-term, as a dip below this level could spark a massive sell off that leads the crypto significantly lower.
Calmly, a cryptocurrency trader, shared his thoughts on XRP in a recent tweet, telling his followers that he believes the cryptocurrency could be positioned for a decline of up to 25% against BTC in the near-term.
3/6-#Ripple / #Bitcoin – $XRP pic.twitter.com/hGYKEQWxvf
— Calmly | full-time trader (@im_calmly) January 8, 2020
The chart he references above suggests that, while looking towards XRP’s BTC trading pair, it has already broken below its key support, which means that a massive drop could be imminent.