Analysis of Fibonacci Levels Indicates Brighter Future for XRP Compared to Dogecoin

According to an evaluation of Fibonacci retracement levels, the prospects for payments-centric cryptocurrency XRP remain optimistic, while those for dogecoin (DOGE) appear bleak.

XRP peaked at $3.40 in mid-January and has since been on a downward trajectory, with the price falling by 25% this month to $2.28, as per data from TradingView and CoinDesk.

Despite the sharp decline, it represents only a 38.2% Fibonacci retracement of the rally that began at the low of 49.5 cents on Nov. 4 and reached a high of $3.40 on Jan. 16. A retracement is a temporary decrease in the price after an upswing.

This is encouraging news for XRP bulls, as this level, along with the 50% and 61.8% ratios, signifies potential areas for the price to revert to its previous trend, according to the CME's explanation.

Trends often retrace to these levels before initiating larger rallies. This implies that XRP bulls have reason to be hopeful about potential gains in the future.

Furthermore, there have been some positive developments regarding XRP recently. On Monday, ETF.com announced that Brazil's securities regulator had approved the first spot XRP exchange-traded fund (ETF) as the Hashdex Nasdaq XRP Fund entered a pre-operational phase with Brazil's Comissão de Valores Mobiliários (CVM).

In the United States, regulators are also examining applications for XRP ETFs. If approved, it could increase institutional demand for XRP, similar to the uptake of bitcoin (BTC) and ether (ETH) ETFs.

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The Fibonacci sequence consists of adding the two preceding numbers to find the next number. The sequence, which has fascinated mathematicians and scientists for centuries, appears as follows: 1, 3, 5, 8, 13, 21, 34, 55, and so on. The ratio of any number to the next higher number is approximately 0.618, and if you divide any number in the sequence by the one two spaces to the right, you get 38.2.

Traders use these ratios and the 50% level to forecast how far an asset might retrace the primary trend, in XRP's case, the bullish run.

The situation is different for dogecoin because a primary trend is deemed to have ended when a retracement surpasses the 61.8% level.

The world's largest meme cryptocurrency by market value has fallen below 21 cents, receding more than 70% of the rally marked by October lows near 10 cents and a high of 48.4 cents in December.

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