A $2.79 support in sight as XRP searches for local bottom: check forecast

The cryptocurrency market has turned red over the last 24 hours and could end the week in a bearish trend.

This is despite breakout performances by a few cryptocurrencies, such as PYTH and LINK, following Chainlink and Pyth Network’s partnerships with the US Department of Commerce. 

Bitcoin risks dropping below $111k after losing 1% of its value, while Ether trades around $4,500, down 2.5%. Ripple’s XRP also failed to hold the $2.99 support level and could dip further as it searches for its local bottom.

XRP fails to hold price above $3

The crypto market has been volatile since the start of the week, and this has been evident in XRP’s price action. The coin started the week trading below $3 following Monday’s flash dump, but quickly recovered above $3 by Wednesday.

However, it has dropped below $3 again heading into the weekend as BTC and others falter. The bearish performance comes despite XRP showing early signs of recovery. 

Recent data from Glassnode indicate that the XRP Spent Output Profit Ratio (SOPR) metric is dropping towards a ratio of 1 as traders took profit following the coin’s rally to $3.66 last month. 

SOPR is “the realized value (USD) divided by the value at creation (USD) of the output.” When SOPR is above 1, it means those who spent XRP are in profit during the time of the transaction and in loss if the figure is below 1. 

With XRP’s SOPR now around 1.09, investors are reluctant to sell their holdings, as it would mean they are selling at a loss, and will suggest they are anticipating XRP price recovery above the $3.00 short-term support.

Furthermore, XRP’s Net Unrealized Profit/Loss (NUPL) reads 0.54, suggesting that the coin could be approaching a local bottom soon. Investors will likely take advantage of the dip in price to increase their exposure to XRP heading into the last few months of the year. 

XRP eyes a breakout above $3.4 despite market-wide selloff

Price action has been choppy over the past few weeks, but the XRP/USD 4-hour chart remains bullish and efficient. XRP failed to hold the $2.99 support level, but the bulls will likely hold the next support region at $2.79.

The Relative Strength Index (RSI), currently at 50, shows that the bears might be getting exhausted. The MACD lines are also at the neutral zone and could enter the positive territory once buyers regain control of the market. 

If the market embarks on a recovery, traders will be looking at the $3.35 resistance level with interest. Hitting this resistance level could signal a breakout that would see XRP hit a new all-time high of $4 or above. 

However, XRP could likely drop to the $2.79 support level over the next few hours if the market sell-off continues.

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