Ripple's Price Poised for 18% Correction as Investors Sell-Off Post Resistance Failure

The price of Ripple (XRP) is eyeing an 18% correction on the daily chart after failing to sustain above a crucial resistance level. The lack of recovery is likely encouraging investors to sell, potentially triggering a deeper decline that could make a recovery more challenging.

Ripple's Price Predicted to Correct by 18%, Here's Why

The price of Ripple (XRP) is eyeing a significant downward correction on the daily chart after failing to conquer a crucial resistance level. The lack of recovery is possibly prompting investors to sell, which could lead to a deeper decline, making a recovery even more challenging.

Ripple Investors Step Back

As XRP fell to the $0.42 mark, it instilled a sense of pessimism among many token holders, which is evident in their behavior. The Daily Active Addresses (DAA) price divergence is currently flashing a sell signal.

This occurs when the price is rising, but participation is declining, or both factors are negative. The latter scenario is what XRP is exhibiting, suggesting that XRP holders are more likely to sell their holdings before they incur further losses.

The self-preservation sentiment is becoming more prevalent among potential investors as well. This is evident in the network growth metric, which is currently at a four-year low. Network growth measures the rate at which new addresses are created on the network.

It is used to gauge the project's traction in the market and whether it is losing or gaining steam. Ripple is clearly losing steam as potential investors see no merit in engaging with XRP. Consequently, XRP's price may have to absorb the selling pressure.

XRP Price Prediction

XRP is trading at $0.51, just above the 23.6% Fibonacci retracement level of $0.42 and below the 38.2% level of $0.73. This Fib level is also known as the bear market support floor. The rationale behind this is that as long as this support level holds, the cryptocurrency has a chance to recover.

However, with the downtrend being acknowledged by investors, it appears that XRP is likely to break below this support. Doing so would lead the altcoin to fall to the $0.47 support level, marking an 18% decline as the Ripple token targets the $0.42 support.

XRP/USDT 1-Day Chart. Source: TradingView

However, if XRP manages to bounce off the 23.6% Fib level and reclaim the 38.2% Fib, marked at $0.57, as support, the bearish thesis could be invalidated. This would allow the altcoin to rise towards $0.60, recovering the recent losses.