Ripple’s XRP has been on a downward trend since early October. This decline began after the U.S. Securities and Exchange Commission (SEC) announced that it would appeal a federal judge’s ruling in its case against the payment services provider.
Due to the price drop, the supply of XRP held in profit reached its lowest level since July. In this analysis, BeInCrypto assesses how long the downturn can last.
Investors count their losses
On October 2, the SEC filed its notice of appeal, seeking to reverse the court’s ruling that programmatic sales of XRP to retail investors did not constitute a violation of securities laws. The regulator then filed its appeal on October 10, prompting Ripple to file a cross-appeal of its own.
This has put downward pressure on the altcoin over the past month, with it trading at $0.50 at press time, having lost 6% of its value since Oct. 2.
Additionally, the drop has led to a reduction in the percentage of XRP supply held in profit. According to data from Santiment, that number now stands at 70.4% — the lowest it’s been since July 12. That metric was at 90% in early October, prior to the SEC’s notice of appeal.
Read more: How to buy your first Ripple (XRP)?
XRP Supply in Profit. Source: Santiment
As such, XRP’s declining Relative Strength Index (RSI) reflects a sustained increase in selling pressure. Currently at 38.77, this indicator — used to assess whether an asset is oversold or overbought — suggests that selling activity has outweighed buying among traders.
RSI from XRP. Source: Santiment
XRP Price Prediction
The price drop has taken the altcoin below the critical support floor of $0.52. At the time of writing, it is trading at $0.50, and with buying pressure easing, XRP is at risk of extending its decline.
Readings from its Fibonacci Retracement tool suggest that the altcoin may attempt to test the $0.46 support level. If bulls fail to defend it, XRP could plummet to the July 5 low of $0.38.
Read more: Ripple (XRP) Price Prediction 2024/2025/2030
XRP Price Analysis. Source: TradingView
However, a shift in market sentiment from bearish to bullish would invalidate this projection. If this happens, the price of XRP could attempt to break above $0.52. If the move is successful, the altcoin’s chances of trading above $0.60 increase.
The article XRP Price Drops After SEC Appeal; How Long Will It Fall? was first seen on BeInCrypto Brazil.
