XRP has recently experienced a significant retracement, causing ripples of concern among some investors. This downward trend follows a rally triggered by a favorable ruling in the Ripple case. However, the U.S. Securities and Exchange Commission’s (SEC) contemplation of an appeal against the verdict has led to a decline in investor confidence and a subsequent 33% drop in XRP’s value from its peak at $0.9380 on 13 July 2023.
Yesterday, prominent crypto trader and analyst Michaël van de Poppe provided an in-depth analysis of this situation, highlighting two primary reasons for XRP’s retracement.
Firstly, according to Van de Poppe, long-term investors, who have held onto XRP for approximately 1.5 years, are now capitalizing on the opportunity to exit their positions. The recent rally propelled XRP to highs not seen in over a year, with the last peak in the $0.9 territory occurring in March 2022. Investors who acquired XRP during this period are leveraging this opportunity to exit the market, thereby increasing selling pressure and contributing to the price decline.
Secondly, Van de Poppe believes that potential buyers lack confidence, leading to their reluctance to enter the market. Per a report by Albert Brown for The Crypto Basic, the SEC’s potential appeal has significantly contributed to this uncertainty and the decision on 31 July 2023 by Judge Jed Rakoff in the SEC vs. Terraform Labs case further fueled this apprehension.
Despite these challenges, experienced traders like van de Poppe are identifying opportunities amidst the corrections. He emphasizes the importance of historical support zones in pinpointing entry opportunities. In the case of XRP, he highlights the weekly timeframe as a period that often presents clear opportunities for strategic entry.
Van de Poppe’s analysis of the weekly XRP chart suggests that due to the current conservative sentiment in the market, corrections during this bearish phase are more significant compared to the shallow corrections seen in bull cycles. He identifies a green area, representing a price range of $0.45 to $0.56, as a potential retest on the weekly timeframe and the most indicative entry point for the upcoming cycle.
At the time of writing, XRP is trading at around $0.618, up 0.49% in the past 24-hour period.
Featured Image Credit: Photo/illustration by vjkombajn via Pixabay
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