XRP Must First Drop to Retest the 300WMA Before a Surge to the Chasm at $50

XRP has the potential to rally toward a two-digit price target, but it may first need to correct further to retest support at the 300WMA.

After rising to a three-month high of $1.69 two weeks ago, XRP ran into resistance at this level and started to pull back. The correction has now lasted nine days, with XRP falling to $1.3680 at the time of writing. Despite the recent decline, XRP remains up nearly 29% in August.

However, market analyst EGRAG believes the price may have more room to fall before the next major upsurge. To him, XRP could decline toward the $1.00-$1.10 range, where it would retest the 300-week moving average (300W MA). 

XRP Could Follow the 2020/2021 Pattern

Notably, the idea comes from how XRP behaved around the 300W MA in previous market cycles. EGRAG believes the current market may be approaching a similar retest phase. 

Historically, XRP has moved through several stages: it first breaks above and reclaims the 300WMA, then returns to test the level as a fear-driven event or major news creates more volatility. If the level holds, XRP can build strength and eventually move into a larger expansion.

This pattern played out during the 2020/2021 cycle. Notably, XRP reclaimed the 300WMA in July 2020 and moved above the indicator as its price climbed toward a high around $0.79 by November 2020. 

The market then collapsed, with XRP falling back to retest the 300WMA at around $0.17 in December 2020. Bearish reports linked to the SEC’s lawsuit against Ripple added to the selling pressure at the time.

Despite the negative news and multiple delistings from U.S. exchanges, XRP held its structure around the 300W MA and continued to use the level as support. By January 2021, XRP had started to recover, eventually reaching a new high of $1.96 by April 2021.

XRP Faces the 300WMA at $1.03

Data from the chart shows that the 300W MA currently sits at around $1.03, and the moving average continues to rise. Because of this, EGRAG does not consider a drop toward $1.00-$1.10 automatically bearish. However, he sees it as a possible retest of an important long-term indicator.

If XRP returns to that area, trades around the level through short-term wicks, and then moves back above the 300W MA, the move could provide the confirmation needed. From there, the roadmap points to $1.65 as the first major level XRP needs to reclaim, followed by $2.00-$2.80 as the next major area of resistance.

A break through those levels could then open the larger price channel. EGRAG’s longer-term roadmap places potential targets at $15, $27, and $50. These targets align with the Chasm line, which has acted as XRP’s target level since 2017.

EGRAG also mentioned the possibility that negative news surrounding the Clarity Act, or another major headline, could trigger the volatility necessary for XRP to return to the $1.00-$1.10 area. 

However, he admitted that the chart cannot predict what news will emerge. Essentially, the 300WMA near $1.03 represents the first major level to watch if the correction continues. If XRP holds the moving average, its broader bullish structure could remain intact.