The price of Ripple’s XRP token is testing new multi-year lows as correlation with Bitcoin may be becoming inversely correlated.
While Bitcoin (BTC) is currently showing weakness with the recent retracement from $7,500 to $6,900, XRP price is remaining relatively stable as the XRP/BTC pair is stabilizing.
But it’s not only the price of XRP that is remaining reasonably stable against BTC, but Stellar Lumens (XLM) is also showing strength. Would this imply that the inverse correlation is back?
Crypto market daily performance. Source: Coin360
XRP breaks back above the crucial level on the BTC pair
As discussed in the previous article, the red area was a vital level for XRP to reclaim to sustain any bullish momentum. The price wasn’t allowed to drop below the monthly level of 0.00002360 satoshis, which was held as support.
After that, a breakout above the 0.00002500-0.00002550 satoshis level was crucial. Luckily, the breakout occurred.
XRP BTC 1-day chart. Source: TradingView
That’s the first step for some momentum on the chart. The next crucial step would be a successful support test of the red zone. If such a test confirms the support level here, any further upwards momentum is likely to occur.
Overall, as many altcoins are showing a similar structure, the price of XRP is stuck in a sideways range between 0.00002350 satoshis and 0.00003300/0.00003800 satoshis, as the price has been hovering around here for ten months.
Remarkably, the price of XRP against BTC is on the same level as one month ago, just before the big crash of Bitcoin occurred. Given that the price is stabilizing and not being affected by the movements of Bitcoin shows strength and a possible bottom formation for XRP.
Older investors probably remember the good old days, during which XRP had an inverse correlation with BTC. The moment Bitcoin started to drop, XRP started to bounce upwards in the BTC pair, showing strength. This inverse correlation could be back and may become apparent in the coming period — the moment Bitcoin might continue its retracement.
USD pair facing resistance and needs to flip crucial support
XRP USDT 1-day chart. Source: TradingView
The USDT pair is facing a resistance level, which was the last area before the significant drop of Bitcoin occurred. This resistance zone is marked red on the chart and is at the $0.20-0.22 level.
For bullish momentum, reclaiming this level would create a solid floor for continuation towards $0.28-0.30 as the next resistances.
However, claiming the previous support at $0.1775 would also be a bullish confirmation for continuing upwards. This area is comparable with the area around $6,750-6,800 for Bitcoin. But losing the green zone would imply that XRP is going to test the support levels from beginning March again as can be seen in the following chart.
XRP USDT 1-week chart. Source: TradingView
The weekly chart is a crucial factor in this. A weekly close above the resistance (red zones) would create a continuation possible towards the next resistance around the $0.30 level.
However, if the weekly close won’t be above the resistance area, then the chart is showing weakness, and it’s quite likely to see a retest of the support around $0.145 again.
As the chart is showing, the $0.145 area is a crucial level to hold for XRP. If that level is lost, then there isn’t any significant support until the $0.06 zone if another 60% drop occurs, and which would put XRP investors into depression mode.
XRP’s sister coin XLM is another crypto to watch
Stellar Lumens (XLM) is very similar and has historically followed in the footsteps of XRP. When XRP moves, XLM moves.
XLM BTC 1-day chart. Source: TradingView
The XLM chart is showing a similar structure to XRP. A very long range in which it’s been moving for almost a year, showing clear support between 0.00000550-0.00000610 satoshis.
The resistance of this range is at 0.00000810-0.00000820 satoshis and 0.00000880-0.00000910 satoshis. A breakout above these levels would create space for 0.00001400-0.00001500 and a massive surge. However, to get there, the price of XLM must first break through the resistance area around 0.00000700 satoshis.
Remarkably, the price of XLM is also holding up reasonably well in the BTC pair, despite the massive drop of Bitcoin recently. The price of XLM/BTC is the same as one month ago before the big drop in Bitcoin price happened on March 12.
Similarly, if XLM holds the marked green zone for support (around 0.00000600 satoshis), a new, big surge could occur towards the range highs.
Stellar Lumens needs to claim $0.04 as support
XLM USDT 1-day chart. Source: TradingView
The XLM/USDT chart is showing a clear rejection at the resistance of $0.0538, implying that lower levels have to be tested to confirm support levels.
The area to look for is the marked green zone around $0.04-0.0425. Holding there would confirm a support/resistance flip and reclaim of previous support.
Such a support/resistance flip is what traders should be aiming for, as such a flip could give perspectives towards the next resistance around $0.075-0.095 area. This area is the next vital area to watch for. A breakout above there would provide a higher high and potential bull market movements.
However, losing the green zone would give the coin further downwards pressure towards the lows around $0.03, putting investors for XLM in depression as well.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
