XRP Drops 11% Amid SEC Legal Battle, Technical Indicators Bearish

XRP, the cryptocurrency associated with Ripple, has seen notable price movements in recent days, with a gain of over 6% in the last 24 hours, bringing its price to $1.90. However, experts have noted that XRP is currently trapped within a descending parallel channel, indicating a short-term bearish trend. The critical support level is around $1.75, with resistance at approximately $2.66. The centerline of this channel, acting as a short-term resistance, is near $1.95 to $2.05. XRP recently broke below this support range and is now retesting it, which could potentially act as new resistance. A confirmed breakout above $2.05 could lead to resistance at $2.15, with further hurdles around $2.24 to $2.30.

Currently, XRP is in a corrective phase, moving in an ABC structure. There is a cluster of support around $1.55 to $1.57, which might offer a temporary bounce. However, the overall trend remains down unless XRP can decisively break above $2.17. If it fails to do so, further declines towards $1.55 are expected, possibly even testing the $1.33 to $1.21 range. From a weekly perspective, XRP has bounced from the 78.6% Fibonacci retracement level, providing support near $1.60. This level is crucial—if XRP drops below this, the next support could be around $1.30 to $1.40. The resistance levels to watch are near $2 and a strong barrier at around $3.

On April 7, XRP dropped by 1.22%, extending its two-day loss to over 11% and closing at $1.8983. This decline underperformed the broader market, which was also experiencing turbulence. The price drop comes as investors await Ripple's reply brief in an ongoing legal battle with the Securities and Exchange Commission (SEC). The recent price slump of XRP has been substantial, with the cryptocurrency plummeting nearly 45% from over $3.20 in January to around $1.80. This decline has raised questions about the factors driving the price drop. One analyst predicted that XRP could surge to as high as $27 within the next six months if current technical patterns continue to play out. However, another analysis suggested a 70% chance of the XRP price breaking to the downside and only a 30% chance for an upside breakout.

The price of XRP has been consolidating just above $2.30 for the past few months, showing resilience amid market fluctuations. However, the recent crash, which saw XRP drop 10.4% on Sunday and 12.3% on Monday, hitting $1.7504, has been attributed to a broader crypto market rout. This rout was fueled by external factors, including tariffs imposed by the U.S. government. Despite the price decline, there are signs of fundamental strength in the XRP ecosystem. On-chain data points to a surge in the utility of XRP, with the amount of payments on the XRP Ledger reaching over 693 million XRP on April 7 alone. This increase in transaction volume suggests growing adoption and usage of the XRP network, which could pave the way for a long-term recovery.

Technical indicators, however, paint a more bearish picture. The price of XRP has formally broken below the 200 Exponential Moving Average (EMA) and the important trendline support at about $1.94, validating a bearish continuation pattern. The Relative Strength Index (RSI) is circling oversold territory (~31), and strong selling pressure indicates a precarious situation that could worsen without a reversal catalyst. Investors and traders are closely monitoring the $1.65 level as a potential psychological and technical support level. If this level is broken, XRP could enter a more severe correction, moving closer to the $1.40 range. On the other hand, a swift retaking of the 200 EMA could open routes back to the $2 zone. The recent price drop of XRP has sparked market buzz, with some analysts predicting further declines while others see potential for a recovery. The divergence between price action and fundamental strength suggests that the story of XRP may not be finished yet. While the short-term market outlook remains unclear, the growing utility and adoption of the XRP network could provide a foundation for a long-term recovery.