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The XRP price staged a historic surge in the wake of the landmark July 13 ruling, which determined that XRP is not in and of itself a security. Now it seems as if the euphoria surrounding the verdict is gradually dissipating as XRP has lost a major portion of its gains due to profit-taking.
XRP enthusiast and lawyer Bill Morgan calls attention to the current profit-taking: "So significant was the Torres decision that the whole market moved up that day, including Bitcoin, yet the effect of the decision was that XRP alone has legal clarity. If people want to sell their non-security XRP in those circumstances and take profits, that is their choice. Not my choice."
Due to profit-taking, the XRP price has fallen by almost 33%, barely two weeks after the legal verdict. XRP had hit a high of $0.932 on July 13, rallying over 100% in the aftermath of the landmark ruling.
However, the fifth-largest cryptocurrency still has a chance to limit the damage before losing another critical support level.
At the time of writing, XRP was down 5.20% in the last 24 hours to $0.625 and even 11.92% in the last seven days. That said, XRP is just a mugshot away from the significant daily MA 50 at $0.60, which might decide the fate of the cryptocurrency.
Intriguing scenario unfolds
The most critical test of strength would be XRP confirming support at $0.584 to $0.60. Following a retest in April of this year, XRP confirmed resistance near this level, namely around the $0.584 level.
If XRP affirms this range as support, the falls may be halted, at least in the short term. Meanwhile, cryptocurrency analysts have noticed an interesting development on the XRP chart: a bullish divergence.
$XRP Bullish Divergence!
— Crypto Rover (@rovercrc) August 4, 2023
I'm buying. pic.twitter.com/MqbXXUhK6l
A bullish divergence happens when prices fall to a new low while an oscillator, typically the RSI, does not. This situation shows that bears are losing power and that bulls are preparing to retake control of the market. A positive divergence usually signals the end of a downtrend.
On the other hand, if bulls fail to hold the $0.60 level as support, XRP risks losing all of the gains made following the July 13 verdict. In this case, XRP could revert to its prior range, with support and resistance at $0.487 and $0.584, respectively.
Yuri Molchan
Arman Shirinyan
