The price of XRP has set a bearish outlook for December 2020 and a return to levels last seen during the 2020 COVID-19 crash. Therefore, investors should be wary of Ripple.
XRP price does not benefit.
The XRP price action since March 29 has produced four distinct lows and highs, which, when connected using trendlines, form a symmetrical triangle, the pennant. This setting essentially converges between the two trendlines, putting pressure on the price. After a certain point, the coiling up appears as a volatile movement.
Unlike other setups with bias, the pennant can be broken either way. This technical formation predicts 69% of movement, determined by adding the distance between the first swing highs and lows to the breakout point.
XRP price resolved as a bullish move after the last three retests against a lower trendline, but the latest tag triggered a bearish move. On May 5th, the cryptocurrency market crashed, followed by XRP price breaking the pennant’s low trendline of $0.575.
Add the predicted measure to this breakout point and you’ll see a target of $0.176. However, unlike many altcoins, the price of XRP has maintained momentum without the flash crashing. So, if there is a quick recovery above the lower trendline, there is hope for a bullish.
However, if it fails, the remittance token may crash at $0.330. When this barrier is broken, the price of XRP will drop to its projected target of $0.176.
Underpinning this potential decline in XRP price is the 365-day market value versus realized value (MVRV) model. As explained in the previous article, this metric is used to measure the psychology of holders by measuring the average profit and loss of investors who have purchased XRP tokens over the past year.
A negative value usually indicates that these holders are in their hands and are not likely to sell. However, a positive value indicates that the holder is making a profit, which obviously increases the likelihood of a collision.
Historical data for XRP shows that the 365-day MVRV is hovering around -38%, a well-known support level and the basis for a reversal movement. However, in December 2018, March 2020 and December 2020 there is a second support floor of -50% that triggered a change in the trend.
So, the possibility of going lower is still on the XRP price card, which interestingly supports the bearish outlook described from a technical point of view.