Ripple (XRP)’s continued rise in the risk of fatigue as its price tests the resistance level with a history of triggering a 65% price collapse.
XRP price increases by 30%
XRP prices rose almost 30% to $ 0.36 on June 24, four days after falling from $ 0.28, the lowest level since January 2021.
The Retracement rally symbol could reach $ 0.41 next time, according to its cup-and-handle pattern shown in the image below.
Interestingly, the indicator’s profit target is the same as the 50-day exponential moving average of XRP (50-day EMA; red wave).
High resistance barrier
The cup-and-handle bullish reversal setup tends to achieve its profit target with 61% success, according to long-time analyst Thomas Bulkowski.
But it seems that the case of XRP falls into the 39% failure spectrum due to the contradictory technical signal displayed by its 200-4H exponential moving average (EMA).
XRP’s 200-4H EMA (blue wave in the image below) has previously served as a strong distribution signal. Interestingly, in April 2022, the symbol tried to break through the wave resistance in question many times, only to face rejection in each attempt; it dropped by 65% to $ 0.28 later.
Continued cup-and-handle violations have stopped midway after the XRP retested the 200-4H EMA as a resistance on June 23rd. The symbol now awaits further confirmation of bias while there is a risk of a price reduction similar to what happened after April.
The overvalued XRP relative strength index (RSI), now above 70, also increases the possibility of a provisional price adjustment.
XRP LTF breakdown in progress
The shortcoming of the shorter timeframe XRP is in line with the huge bearish setup of the longer timeframe.
As Cointelegraph reported earlier, XRP has gone into a breakdown phase after leaving its declining triangle structure in early May.
As a rule of technical analysis, its triangular breakdown should have it falling by as much as the maximum height of the structure, which puts its negative target close to $ 1.86.
In other words, another 50% price reduction for XRP could occur at the end of July this year.
50,000,000 #XRP ($ 16,249,045) transferred from Ripple to an unknown wallet https://t.co/FalGAzxNxg
– Whale Alert (@whale_alert) June 23, 2022
The macroeconomic risks posed by the Central Bank’s hawkish policies further strengthen the bearish bias of the XRP. The XRP / USD pair has typically traded lower along with riskier assets in 2022, with a correlation coefficient with the Nasdaq Composite, which was 0.90 as of June 24th.
Rating 1 means that the two properties move in perfect synchronization.
On the other hand, expectations that Ripple would win a lawsuit filed by the US Securities and Exchange Commission (SEC) for “allegedly” selling unlisted securities could deny the bearish setup.
I have declared it for more than a year to many @ Gára and #XRP Supporters underestimate the negative impact of the SEC lawsuit. B / c Ripple has done well outside the United States and is hiring, etc., people say otherwise. But XRP must not be considered a security in the United States to fulfill its promise https://t.co/oBmiTQOWfJ
– John E Deaton (203 thousand followers Beware of traitors) (@ JohnEDeaton1) June 22, 2022
That said, XRP could return to $ 0.91 by the end of this year if the continued withdrawal continues. Interestingly, the symbol has bounced after testing long-term rising trend line support, as shown below.
The jump has also followed the weekly relative strength index of XRP (RSI) below the 30-volatility threshold, indicating a potential buying opportunity.
The views and opinions expressed herein are those of the authors only and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading business involves risk, you should conduct your own research when making a decision.
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