In our previous idea on Ripple, we stated that it was one of a few cryptocurrencies that failed to reach a new all-time high during the latest bull cycle. Additionally, we expressed our bearish views on it over the coming months, set price targets at 0.30 USD (medium-term) and 0.28 USD (long-term), and presented a conservative setup with two possible scenarios.
Since then, the price of XRPUSD has shot to the upside through the short-term resistance, which is a bullish development we previously outlined. Typically, such price action would invalidate our price targets on the downside for the short-term price target. However, fundamental factors (increasing interest rates and economic tightening) driving the primary trend have not changed, which allows us to stick to our price targets.
Indeed, the abrupt move accompanied news that came out regarding the legal case between RippleLab and the SEC. It took merely a few hours, and we are already noticing a wall of bullish posts forecasting the reversal of the primary trend and the beginning of a new bullish era. However, we have little faith in this thesis because of the slowing global economy and growing geopolitical problems coupled with risk aversion.
We acknowledge that thin volume can lead to a higher price in the short term. However, we think the rally will not sustain in the medium and long term. Furthermore, we believe the recent price action is just a short-lived hype like in the case of other cryptocurrencies that already underwent breakouts to the upside (which were dampened in XRP) from a wide range (in July and August).
As for the short-term, we do not know how much higher XRPUSD can go. However, we are already seeing several warning signs. Because of that, we will pay close attention to volume and price action. Other details are described below.
Illustration 1.01 Illustration 1.01 shows the conservative setup we showed on 8th September 2022. Since its introduction, the breakout to the upside took place, hitting a bullish trigger. Subsequently, the price ripped up more than 40%.
Technical analysis - daily time frame RSI is overbought. MACD and Stochastic are bullish. DM+ and DM- are bullish. Overall, the daily time frame is bullish.
Illustration 1.02 The picture above shows the price action that followed since the introduction of our setup. Declining volume after the breakout serves as a warning sign, hinting at the evaporation of buyers after the steep climb in price.
Technical analysis - weekly time frame RSI, MACD, and Stochastic are also bullish. DM+ and DM- are bullish. Overall, the weekly time frame is bullish.
Illustration 1.03 Illustration 1.03 shows a similar decline in volume on the hourly chart of XRPUSD (this time on Binance instead of Bitstamp).
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Look at my post from just about one month ago calling for this exact move. It has reached my short term target of 55-60 cents. I believe you are correct that we have exhausted our upward move but I disagree on your “lower lows” target and instead would suggest it is more likely a retrace to $0.38-$0.41 is far more likely.
Tradersweekly
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@BustersCharts89, Thank you for sharing your opinions. That was a great call.
BustersCharts89
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@Tradersweekly, a broken clock, as they say...but I will take the compliment.
I reviewed several of your more recent posts and your outlook is bearish on crypto. I generally agree at least to the extent I believe we are trading in a range here (though I think it’s the bottom more broadly speaking) and that the range is open to go lower.
I’m wondering specifically if you have looked at bitcoin cash at all, and if you have any particular opinion on it? I’m personally invested in it. It’s a coin that is frequently included on apps or payment methods that accept crypto, it has a relatively low and fixed supply, it has some function and is not a meme coin, and yet it is nearly at all time lows dating back to the 2018 crash. I cannot figure out from any kind of technical perspective what this coin is doing. Wondering if you had ever looked at it or had any specific thoughts about it.
If not, thanks anyway.
SquishTrade
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Well done. The long wick on today's candle suggest exhaustion may already be setting up a reversal.
Tradersweekly
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@SquishTrade, Yes, I agree. Thank you for the comment.
Visitor783
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Thanks for sharing! I do see the volume is constantly increasing however....🤔
Tradersweekly
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@Visitor783, Feel free to share your charts. I would like to see what you are looking at. Thanks for the comment.
Dtrader2020
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I'm confused. Your text says you are basically bearish. but you tagged it as if you where long on it.
Tradersweekly
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@Dtrader2020, Okay, I see your point; let me explain. My bearish bias is medium and long-term (and price targets too). I did not mention any bias toward the short-term performance as XRP was within the range and, because of it - netural in trend terms (within the rectangle pattern with the upside potential above the resistance and weakness below the support). Since the breakout to the upside, the short-term bias has been bullish; however, I do not think it will last. Thanks for the question; I hope that helps to explain my thoughts.
Look at my post from just about one month ago calling for this exact move. It has reached my short term target of 55-60 cents. I believe you are correct that we have exhausted our upward move but I disagree on your “lower lows” target and instead would suggest it is more likely a retrace to $0.38-$0.41 is far more likely.