Macro risks and a long-term bearish setup continue to spoil XRP’s bullish prospects.
Ripple’s (XRP) ongoing
upside retracement risks exhaustion as its price tests a resistance
level with a history of triggering a 65% price crash.
XRP price rebounds 30%
XRP’s
price gained nearly 30%, rising to $0.36 on June 24, four days after
rebounding from $0.28, its lowest level since January 2021.
The token’s retracement rally could extend to $0.41 next, according to its cup-and-handle pattern shown in the chart below.
Interestingly, the indicator’s profit target is the same as XRP’s 50-day exponential moving average (50-day EMA; the red wave).
Major resistance hurdle
The cup-and-handle bullish reversal setup tends to meet its profit target at a 61% success rate, according to veteran analyst Thomas Bulkowski.
But,
it appears XRP’s case falls in the 39% failure spectrum because of a
conflicting technical signal presented by its 200-4H exponential moving
average (EMA).
XRP’s 200-4H EMA (the blue wave in the chart below) has previously served as a strong distribution signal.
Notably, in April 2022, the token attempted to break above the said
wave resistance multiple times, only to face rejections on each try; it
fell 65% to $0.28 later.
The
ongoing cup-and-handle breakout has stalled midway after XRP retested
the 200-4H EMA as resistance on June 23. Now, the token awaits further
bias confirmation while risking a price decline similar to what
transpired after April.
XRP’s overbought relative strength index (RSI), now above 70, also raises the possibility of an interim price correction.
XRP LTF breakdown underway
The downside scenario on XRP’s shorter-timeframe chart comes in line with giant bearish setups on its longer-timeframe chart.
As Cointelegraph covered earlier, XRP has entered a breakdown stage after exiting its descending triangle structure in early May.
As a rule of technical analysis, its triangle breakdown should have it
fall by as much as the structure’s maximum height, which puts its
downside target near $1.86.
In other words, another 50% price drop for XRP could happen by the end of July this year.
Macro risks led by the Federal Reserve’s hawkish policy further strengthen XRP’s bearish bias. The XRP/USD pair has typically traded lower in tandem with riskier assets in 2022, with a correlation coefficient with the Nasdaq Composite, sitting at 0.90 as of June 24.
A score of 1 means that the two assets moves in perfect sync.
Related: Almost $100M exits US crypto funds in anticipation of hawkish monetary policy
Conversely, anticipations that Ripple would win the lawsuit
filed by the U.S. Securities and Exchange Commission (SEC) for
“allegedly” selling unregistered securities could negate the bearish
setups.
That being said, XRP could rebound toward $0.91 by the end of this
year if the ongoing retracement continues any further. Interestingly,
the token has bounced after testing long-term ascending trendline
support, as shown below.
The
bounce has also followed XRP’s weekly relative strength index (RSI)
decline below 30 — an oversold threshold, which signals a potential
buying opportunity.
The views
and opinions expressed here are solely those of the author and do not
necessarily reflect the views of Cointelegraph.com. Every investment and
trading move involves risk, you should conduct your own research when
making a decision.
source link : https://cointelegraph.com/news/xrp-price-rally-stalls-near-key-level-that-last-time-triggered-a-65-crash
