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Ripple Price Drops to 2.5-Week Low, Eyes Sideways Trading
Ripple’s XRP token fell to a 2.5-week low today, and is looking at a more or less sideways movement in the short-term, chart analysis suggests.
The world’s third-largest cryptocurrency by market capitalization fell to the low of $1.23 at 09:54 UTC today before regaining a little poise, data source CoinMarketCap indicates. Further, XRP is still down 23 percent over the last 24 hours. At press time, XRP is trading at $1.39.
As per OnChainFX, XRP is down 63.41 percent from the record high of $3.84 set Jan. 4.
A look at the charts suggests XRP may have found a bottom and could consolidate in the next 36–48 hours before possibly resuming the sell-off.
The above chart (prices as per Bitfinex) shows:
- Dip demand/bearish exhaustion as indicated by the Doji candle (previous 4-hour candle marked with a circle).
- A head-and-shoulders breakdown (bearish reversal pattern) indicating the rally from the December low of $0.19700 has ended. As per the measured height method, that has opened doors for a drop to $0.30 (though that looks far-fetched currently).
- 50-day moving average (MA) has adopted a bearish bias (sloping downwards).
- Bearish 50-day and 100- day MAs crossover is confirmed (short-term average cuts long-term average from above).
- 200-day MA has shed bullish bias (flattened).
Clearly, the 4-hour chart is loaded with bearish price patterns that indicate scope for a drop to $0.8610 (78.6 percent Fibonacci retracement). However, the relative strength index (RSI) on the chart above shows oversold conditions.
As seen in the chart above, the 5-day and 10-day MAs have adopted bearish bias (sloping downwards). The RSI also favors further downside in XRP. The tide has clearly turned in favor of the bears.
However, the 50-day MA is curled up in favor of the bulls. This coupled with the oversold conditions on the 4-hour chart (as shown by the RSI) and the doji candle on the 4-hour chart could keep XRP rangebound in the next 36–48 hours.
The 50-day MA would shed its bullish bias (top out) following a bout of consolidation, thus opening doors for further losses.
- XRP is likely to trade in the sideways manner in the range of $1.80 to $1.00 in the next day or two, before resuming the sell-off.
- Overall, prices look set to $0.8610–$0.60 levels in the short-run.
- Bullish scenario: A rebound from the 50-day MA, followed by a quick move above $2.25 (Jan. 11 high) would signal a bearish-to-bullish trend change.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripple.
Ripples image via Shutterstock
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
Author: Omkar Godbole
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