Ripple is back in the news again with a seesaw of new developments. On the one hand, Ripple labs announced a huge partnership last week with the Bill Gates Foundation, which adopted XRP exclusively to power the xRapid project. On the other hand, however, Ripple is now also facing its 3rd lawsuit in 3 months, after a claimant brought an action against the company on the grounds that the CEO has allegedly ‘illegally profited’ from XRP’s increased value.
“Despite the state of XRP as a security, defendants failed to register it as such…many of the representations defendants made regarding XRP were designed to drive demand for XRP, allowing defendants to obtain greater returns on their XRP sales…here XRP has all the hallmarks of a security”
Looking at the XRP/BTC chart over 3hr candles we can see that overall XRP has been falling nicely inside a bearish descending wedge pattern over 2018, with a sloping resistance line forcing each bull run back towards the base support at around 70,600 Sats.
Right now the asset has reached the consolidation point of this pattern where we are now waiting to see if the base support can hold the asset and provide us with a bullish reversal, or fail and send the price action down further.
We can see some strong bearish signals ahead that foreshadow a bearish continuation for XRP, namely a distinct trifurcation between the 500/200 and 50 EMA lines (yellow, red and blue respectively). This depicts a significant drop in buying momentum and hints that the support may be surpassed unless sufficient support rallies soon.
Over a shorter 30min candle range, we can see that MACD is still struggling below the signal line with the faster-moving average diverging down through the slower moving average line.
Similarly, RSI is also showing decreasing momentum, as the asset tracks along the lower half of the index channel.
In addition to this, the Ichimoku indicator further confirms a bearish continuation with a resisting Kumo cloud falling below the base support along with a bearish T/K divergence.
All ROI’s and losses are calculated from the ‘danger zone’ here at 70,600 Sats.
Price Target 1: Because of the bearish signals for this particular asset, we are ignoring potential bullish recoveries in this analysis. The first support area for XRP, once it passes below the base support is likely to sit along the 0.5 fib level at 61,000 Sats (-12.97% loss)
Price Target 2: From there the price is most likely to fall to the next Fibonacci support as panic takes over investors. A bearish continuation to the 0.382 level will deliver a loss of 24.36% from the danger zone.
Price Target 3: Depending on market sentiment at this stage, we would hope to see XRP recover briefly back towards the 0.5 fib level resistance. If confidence in the asset is still poor at this level, then we could see XRP find the bottom way down at the lower 0.236 fib support/ 45,200 Sats before seeking new support. Overall this would represent a -35.98% drop in the token’s value from its current position.
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