A BlackRock ETF rumor prompted a big pump-and-dump in the XRP market, which may result in a 20% correction over the next few weeks.
XRP (XRP) is down today and is on the course to log its worst weekly performance since August 2023.
XRP is down, underpeforming the crypto market
As of Nov. 17, XRP's price is around $0.60, down nearly 9.5% week-to-date, including a 7.5% decline in the last 24 hours. The downtrend mirrors price behaviors across most top-ranking cryptocurrencies. However, XRP has underperformed the crypto market, which fell merely 2.5% this week.
A closer examination reveals multiple events that significantly impacted XRP's market dynamics on and before Nov. 17. Let's take a closer look at the reasons below.
BlackRock's XRP ETF rumor
On Nov. 13, XRP's price spiked 12% to around $0.75, driven by a rumor about a BlackRock exchange-traded product (ETF) centered around XRP.
However, Bloomberg's ETF analyst Eric Balchunas debunked the rumor later, leading to a swift collapse back to XRP's initial value on the day. The pump-and-dump in XRP price resulted in massive liquidations, mostly impacting long position holders.
For instance, between Nov. 13 and Nov. 14, the derivatives market witnessed long liquidations worth $17.5 million. In comparison, only $2.87 million worth of short positions were liquidated, according to Coinglass.
The aftermath of the BlackRock XRP ETF rumor was a significant factor in the cryptocurrency's price downward trajectory for the rest of the week.
Its price action on Nov. 17 is somewhat similar, having fallen over 7.5% in the last 24 hours, with long liquidations worth around $5 million versus $300,000 in short liquidations.
XRP whale distribution
XRP's price weakness on Nov. 17 follows modest drops in the holdings of its richest addresses.
For instance, the supply held by addresses with a balance between 100,000 XRP and 100 million XRP has dropped modestly since the BlackRock ETF rumor. In contrast, the 100 million-1 billion XRP balance cohort (mint green) has witnessed a 0.11% rise.
The 1 billion-infinity XRP balance cohort remained flat throughout the week.
Technical pullback
XRP's price decline on Nov. 17 is part of a correction that started after testing a historical resistance trendline near $0.75, as shown below.
The decline is also part of an overbought correction that started on Nov. 6, when XRP's daily relative strength index (RSI) reached its highest level since July 2023. An "overbought" RSI typically precedes selloffs, as illustrated below.
Is the XRP bull run over?
The ongoing XRP price decline so far appears to be a typically bull market correction, after which the general uptrend has a good chance of resuming.
XRP/USD has been fluctuating inside a giant ascending channel since June 2022. As of November 2023, the cryptocurrency entered a correction period after testing the channel's upper trendline as resistance.
From a technical standpoint, it now risks a decline toward the lower trendline near $0.50, down 18.5% from current price levels.
Interestingly, the $0.50-downside target coincides with XRP's 50-week (the red wave) and 200-week (the blue wave) exponential moving average (EMAs). In addition, the level has served as support between March 2021 and January 2022.
Related: Delaware authorities refer fake BlackRock XRP trust filing to state’s Justice Department
Conversely, a decisive breakout above the current resistance level near $0.75 will put XRP price en route toward $1.13 in 2023 or early 2024, up over 80% from current price levels.
The upside target coincides with XRP's 0.382 Fibonacci line.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
