Analysis
XRP traders would do well to follow this safe strategy
Posted:
| Last updated: January 30th, 2024
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
XRP failed to capitalize on its 28 July jump as bullish momentum fizzled out across the market. Despite positive broader market cues, the altcoin noted a downtick in value and was heading towards its 20 June low of $0.70.
At the time of writing, XRP was being traded at $0.726 and held the sixth position on CoinMarketCap’s crypto-rankings.
XRP Daily Chart
Source: XRP/USD, TradingView
XRP’s rebound from $0.51 back in late July was the catalyst for a steady rally, but the 200-SMA (green) limited further upside. The last few days saw the price decline from its $0.779 resistance to the support level of $0.70. While buyers did return at the aforementioned defense, upwards pressure did not result in another price hike.
In light of the weak market momentum on the charts, the next few days could result in some sideways movement before the next swing is initiated.
Reasoning
XRP’s spike on 28 July pushed the candlesticks on the upper band of the Bollinger Bands. Alas, this failed to trigger an extended rally. Moreover, these bands converged on the 12-hour chart (not shown) as volatility was on a decline. The Directional Movement Index’s +DI did maintain an edge over the -DI, but they were in close proximity as neither side dominated market proceedings.
Interestingly, the MACD closed in on a bearish crossover while its histogram noted receding bullish momentum. If bears do initiate a break below $0.70, support can be found at its 20-SMA (red). Although unlikely, a sharper decline would result in a retest of the $0.51 support. On the other hand, a favorable outcome would see XRP head to its 14 July swing high of $0.92.
Conclusion
The lack of a clear direction made it difficult to pinpoint XRP’s next trajectory. However, broader market cues might have a say in this matter. Meanwhile, the best strategy for traders would be to wait and observe the market. Waiting to see a breach of key levels before opening a position would be the best option going forward.
