XRP price has declined over the past week, losing approximately $19 billion in market value. The token's market cap dropped from $147.08 billion on November 12 to $128.50 billion on November 19, which is part of a weakness in its price action. Despite a slight improvement in the overall crypto market, XRP has failed to sustain its momentum.
The performance of XRP over the past 24 hours saw the asset decline by 1.6%, closing at $2.14. In contrast, the overall cryptocurrency market improved by 0.32%. This divergence signals a shift in investor sentiment, and XRP's struggles may continue with its upward charge despite the optimism about ETF-related developments.
The technical outlook for XRP looks bleak after it failed to defend its important support level of $2.19. This failure, in turn, has caused several traders to unwind positions, which has further compounded the downward pressure. The next important support level is at $2.08, which corresponds to the 78.6% Fibonacci retracement level.
A break below this support could extend the losses, with $2.00 acting as a psychological threshold. Analysts suggest that if the price keeps slipping, the token may challenge the $1.80 mark, which reflects the overall weakness in the market.
On the upside, a recovery above $2.25 can act as a positive signal. However, that does not seem likely without better investor sentiment. The technical indicators for XRP are mixed, and a death cross was created on the daily chart.
This is a technical signal, the 50-day exponential moving average (EMA) crossing below the 200-day EMA, which indicates short-term selling pressures are dominating long-term buying interest. Unless XRP can gain momentum in the near future, it might experience additional losses, potentially targeting $1.25.
XRP's current struggles also indicate a poor decline in investor sentiment. On-chain data reveals that currently only 58.5% of the circulating supply of XRP is profitable, which is the lowest in the last 12 months. This decrease in profitability implies that many investors are now sitting on losses, and this could deter new buyers, increasing sell-side pressure.
The downturn in XRP's market cap and cooling off of institutional interest, evident by a 35% drop in 24-hour trading volume, is a signal of the cooling enthusiasm that was present earlier in the year. While the ETF launch had given some cause for optimism, the absence of sustained buying pressure suggests a potential market is entering a phase of correction, however, rather than a full recovery.
Despite this lessening sentiment, there are some analysts who see a possibility of recovery. Long-term structural patterns, like the fractal model based on the previous market cycles of XRP, point to a potential breakout towards multi-year highs.
However, this scenario is dependent on the asset breaking through its current resistance levels, especially $2.25. For now, the market performance of XRP is fragile, and its future direction is highly dependent on overcoming some significant technical hurdles and a shift in the sentiment of investors.
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