XRP, the native token of the XRP Ledger, has seen its price decline by 11.02% over the past 24 hours to $0.7368 per token. This steep drop comes after XRP had been trading sideways for the past week between $0.80 and $0.85.
Examining the Recent Price Action
The significant 11% single-day drop seems to have been triggered by overall weakness in the cryptocurrency market, with majors like Bitcoin and Ethereum also falling over the past day. XRP's trading volume spiked to $2.76 billion, suggesting increased activity among traders and investors.
Looking at XRP's price performance over the past week, it is down 8.71%. Over the past month, however, XRP remains up 48.14% as it had been in an uptrend for most of June and July. Over the past 6 months, XRP has seen tremendous growth of 82.69%.
Assessing Key Support and Resistance Levels
With the sharp decline, XRP broke below its 20-day moving average near $0.78 which had been providing support. The next key support level to watch will be the psychological $0.70 level.
If the selling pressure continues, XRP could test support around $0.65 which marks its 50-day moving average. This would also line up with the 38.2% Fibonacci retracement level from its June low.
On the upside, XRP will now face resistance at $0.75 and $0.80 - previous areas of support that could now act as resistance. A move back above $0.80 would be the first sign that XRP could be stabilizing.
What's the Outlook for XRP?
Given the broader weakness in the cryptocurrency market, XRP may continue facing selling pressure in the near-term. However, its strong uptrend over the past month suggests there is still underlying demand.
I expect XRP will find support near the $0.70 level over the coming days before attempting to rebound back above $0.80. As long as it can hold above the key 50-day moving average, the medium-term uptrend will remain intact.
Should You Buy XRP After the Recent Dip?
The recent 11% drop could present a buying opportunity for those looking to gain XRP exposure. Dollar cost averaging into a position around current levels could be prudent.
However, caution is still warranted in the near-term to see if XRP can stabilize and find support. Using stop-losses is advised to protect from any further downside moves. Ultimately, XRP's strong long-term growth prospects remain positive as adoption increases.
Does XRP Have the Potential to Reach New Highs in 2023?
Despite XRP's recent price volatility, it still has significant upside potential in 2023 fueled by increasing utility and adoption of the XRP Ledger. If the crypto market sees a broader rally, XRP could certainly make a run toward its all-time high around $3.30.
For that to materialize, XRP needs to keep making progress around settlement, micropayments and central bank digital currencies (CBDCs). If XRP can become an integral part of the global financial infrastructure, its long-term growth outlook remains very bright.