XRP Price Loses Key Support as David Portnoy Buys the Dip

XRP price has crashed for four consecutive weeks and reached its lowest level since October 10 last year. It also lost a crucial support level, as Ripple ETFe suffered the largest weekly outflows and liquidations rose. So, is it safe to buy the dip as David Portnoy did?

David Portnoy Buys XRP Dip as the Crash Intensifies

David Portnoy, the founder of Barstool Sports, who is worth over $200 million, is using the dollar cost averaging technique as the XRP price dips.

In a broadcast on Friday, he noted that he had bought another $1 million in XRP and $500k in Bitcoin. He pointed to a popular Warren Buffett quote that recommends buying assets when there is “blood in the streets”.

Portnoy believes that the ongoing sell-off will end and that the token will eventually bounce back as investors start buying the dip.

XRP Dropped After Kevin Warsh Nomination

The ongoing XRP price dip is largely due to broader weakness in the crypto market, which has affected Bitcoin and most altcoins. Bitcoin has dropped from the year-to-date high of $99,000 to $82,000, while Ethereum has moved below the key support level at $3,000.

The market capitalization of all coins dropped below the key support level at $3 trillion and now stands at $2.8 trillion. This sell-off continued after Donald Trump announced Kevin Warsh as his pick to lead the Federal Reserve.

Warsh is seen as being bearish for the crypto market for several reasons. First, while he has recently supported the industry, this view is likely due to his goal of becoming the Federal Reserve Chairman. He blasted Bitcoin in an opinion piece for the Wall Street Journal in 2018, citing its volatility.

Second, Warsh has been an inflation hawk for many years. For example, he advocated for the end of quantitative easing when he served at the Federal Reserve in 2011. Most recently, he blamed the Fed for hiking interest rates too late after the pandemic. Therefore, there is fear that Warsh will become like Jerome Powell, who promised Trump low interest rates but then embraced a hawkish stance as Fed Chair.

XRP ETF Outflows Jumped This Week

The XRP price crash accelerated as American investors dumped their tokens lately. Data compiled by SoSoValue shows that spot XRP ETFs suffered the largest outflows on January 29, losing over $92 million in assets.

While the funds gained $16 million on Friday, it was not enough to offset the losses from Thursday. As a result, the funds recorded a weekly outflow of $52 million, up from the previous week’s $40 million. The monthly inflow of $15.5 million was much lower than the $499 million in December.

The funds have now recorded cumulative net inflows of over $1.18 billion since the first one launched in November.

This trend is a sign that American investors are losing their momentum and enthusiasm about XRP as its price crash gains steam.

XRP Price Technical Analysis After Losing a Key Support

The weekly timeframe chart shows that the Ripple price has been in a strong downward trend in the past few months. It has crashed from a high of $3.6845 in July last year to the current $1.6974.

The token dropped below the important support level at $1.7788, its lowest level in December last year. It has also moved below the 50% Fibonacci Retracement level at $1.9892.

Additionally, it has moved below the 100-week and 50-week Weighted Moving Averages (WMA), and is showing signs of forming a mini death cross pattern. It remains below the Supertrend indicator.

Therefore, the most likely scenario is where the token continues falling as sellers target the next key support level at $1.5892, the 61.8%Fibonacci Retracement level. A drop below that level points to a retreat to $1.