XRP made the headlines once again after Ripple’s motion to compel SEC to produce documents regarding BTC, ETH and XRP was countered by the agency, which called the demands ‘premature’ and ‘moot’. As both sides traded blows with respect to the latest developments of the lawsuit, the digital asset’s price remained confined within a tight channel of $0.92 and $0.79. Despite the consolidation, XRP maintained the seventh position in the crypto-rankings with a market cap of just a little over $38 Billion at press time.
XRP’s 12-hour chart
Source: XRP/USD, TradingView
A look at XRP’s chart showed that the cryptocurrency was on a steady decline after touching the $1.10 mark on the back of an ascending triangle breakout. The downtrend led to the formation of a descending channel and while the pattern does see a break to the upside, XRP could reset between its demand zone of $0.64-$0.70 before attempting to pierce through the upper trendline. Post the reset, a breakout from the up-channel could be challenged at $0.92-resistance and a retest of $0.79 could allow XRP to fully realize its goal of $1.10. Such a development would represent gains of 33% from the upper trendline of the pattern.
Reasoning
Relative Strength Index was denied a move above 50 and switched to a downtrend as XRP met with rejection at its overhead resistance of $1.10. RSI was expected to continue on its southbound journey to the oversold zone, where a reversal was expected. MACD line was nearly superimposed on Signal line, but the histogram did tilt towards the bears. Momentum was also bearish-neutral on Awesome Oscillator.
Since RSI indicated some more downside, while MACD and AO remained bearish-neutral, XRP was expected to accrue some more losses before a bullish comeback. Hence, focus must be on the demand zone between $0.64 and $0.70 in the coming days. If bulls concede this channel to the sellers, the price was vulnerable to an extended sell-off.
Conclusion
XRP’s down-channel was yet to reach its conclusion and the crypto-asset eyed some minor losses moving forward. Its indicators were supportive of such an outcome but a bounce back was expected once XRP touched its demand zone between $0.64-$0.70. After a reset, a breakout from its down-channel would likely catapult XRP back above the $1-mark.
