Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice
Last month, a report found that XRP distribution charts showed whales collecting more of the token even as the XRP lawsuit dragged on. Over the past few weeks, Bitcoin Dominance has slowly risen from 40% to 44.2% at the time of writing.
This statistic showed that Bitcoin has steadily absorbed more of the capital in the crypto sphere. This capital flows out of altcoins and into Bitcoin. A trend of rising BTC dominance does not provide a good buying opportunity on altcoins.
XRP-1 daily chart
On the price charts, XRP has been trading in a bearish channel (white) since mid-August last year. At the end of January, there was an anomaly below the channel lows. The mid-range has historically been respected as support and resistance. This lent credibility to the idea of the channel pattern.
For the past month, the price has been compressed within the yellow trend lines. This price action is generally followed by an upward or downward break, which would not be confirmed until one of the trendlines is broken and retested.
The USD 0.76 and USD 0.88 levels offer immediate resistance, while the USD 0.8 area may also act as a supply zone for the coming days.
In addition to the depressing price action, the RSI has also hovered indecisively around the neutral 50 line for the past few days. It stood at 50.8 at the time of going to press. The OBV has fallen in recent weeks, falling below a low reached in January. This indicates that the sales volume has steadily increased.
The Directional Movement Index did not show a strong trend – which was in line with the compression over the past few days.
The indicators showed that sellers were likely to remain the dominant force. The long-term market structure appeared to have been broken during the early February rally. As things stand, XRP would need to flip the $0.8 area from supply to demand to have a longer-term bullish bias.
Even in that scenario, the USD 0.88 and USD 1 levels could offer significant resistance to the bulls on their way up. In the south, $0.69 and $0.64 levels are said to provide support, but unless there is demand, these levels may not provide a buying opportunity.