Ripple (XRP) Faces Recovery Amidst Market Turbulence

On January 3, the price of Ripple (XRP) fell to its lowest level in three years against Bitcoin. This occurred following a widespread sell-off instigated by a blog post that proposed the rejection of spot Bitcoin exchange-traded funds by the US Securities and Exchange Commission (SEC).

At the XRP/USD three-month nadir of $0.5000, the Ripple price corrected a market imbalance or inefficiency denoted by the fair value gap (FVG) spanning the range of $0.4927 to $0.5111.

An FVG is significant because it signifies market errors, and the price tends to revert to these regions and trade further to fill the void.

As multiple trend strength quantifiers, including the Average Directional Index (ADX) and the Relative Strength Index (RSI), indicate increasing bullish effort, the XRP price appears poised for a recovery now that the FVG has been filled.

The RSI indicates increasing momentum when it moves north, whereas the ADX measures strength. A rising ADX line suggests an intensifying trend, indicating the current trend will persist.

Nevertheless, a declining ADX line suggests a weakening of the underlying trend, which may result in a retracement or consolidation phase for the asset’s price.

In the interim, XRP is one of the alternative cryptocurrencies, capitalizing on the widespread optimism that the US SEC will uphold the spot BTC ETF applications.

The most recent development, in which the filers, including VanEck, Grayscale, and Fidelity, have submitted applications for securities registration with the financial regulator, demonstrates this optimism.

The momentum surrounding approval seems to have peaked following the SEC’s meeting with the NYSE, NASDAQ, and CBOE exchanges to deliberate on the spot BTC ETF.

The Ripple price is poised for a recovery as the market’s inefficiency is resolved, as indicated by the rising momentum of the RSI and the steady strengthening of the ongoing recovery as measured by the ADX.

Enhanced purchasing pressure over present levels may reestablish the price of Ripple within the ascending wedge’s confines above $0.6000.

Price movement to the north could potentially cause the rising wedge’s upper boundary to be breached and the price target of $0.6500 to be breached.

Highly favorable conditions could cause Ripple’s price to accumulate sell-side liquidity above the $0.7000 psychological threshold, extending its gains. Such an action would result in an increase of 20% over the present levels.

Traders who booked early profits after suffering losses on Wednesday could cause the XRP price to decline, possibly returning to the FVG.

Confirming the continuance of the downtrend would be a break and close below the midline of this order block at $0.5023; an extended decline would likely cause the XRP market value to reach the range low at $0.4174.