- XRP and other altcoins are affected by Bitcoin’s price activity and are susceptible to price action alterations being triggered by incoming news.
- XRP is at a crossroads with its links to the flagship cryptocurrency, Bitcoin
- The price of XRP fell heavily from the 200 day period of EMA after coming to a three-month-low on June 22nd.
- A head and shoulders pattern shows XRP could set lower targets if support levels dip.
Cryptocurrencies have been undergoing huge price fluctuations over the past month as countries rejected and affirmed their stances on Bitcoin. Altcoins are inherently tied to Bitcoin, due to the fact that, before stablecoins, all coins were measured in BTC pairings.
With Bitcoin losing much of its steam over the past month, Altcoin prices face a similar fate. Ripple, who surged to a new year high value of $2 in 2021, is showing signs of regression as analysts draw up reversing trading patterns.
Ripple Is Between the Lines
Established traders have highlighted the appearance of a bearish price trading pattern in the XRP/BTC pairing known as head and shoulders (H&S). In such a scenario, the asset forms three peaks, the two exterior peaks featuring similar heights, with the middle peak being the highest.
H&S is confirmed when price dips below support, signaling a bearish trend. Peter Brandt drew attention to the H&S pattern on his Twitter, suggesting a possible price downtrend if the price drops below support. Added volume can be a sign of bearish behaviour for traders. Peter Brandt, who previously predicted an 80% downfall in Bitcoin’s value in 2018, is stating now that XRP is “about to turn into a tidal wave.“
Negative sentiment among traders is being fueled by Ripple’s ongoing case with the SEC. Even though their partnership with MoneyGram, that preceded the lawsuit, was terminated, XRP saw assertive price movement amid the 2021 bull run. The price of XRP reached $1.96 in April, as Ripple Co-founders filed to dismiss the case. Despite these efforts, the lawsuit has had a damaging effect on the price of XRP, with Coinbase delisting the token.
On the Flipside
- Traders still believe downside momentum will be more achievable if XRP does not break resistance.
- A $20-$30 value is achievable for XRP to hit at the end of the bull cycle if positive news does not become overshadowed by more market FUD.
- A Ripple win of “fair notice” will have a strong impact on the future actions of the SEC.
USD Price Consolidation Is Another Angle
Trading is always a two-way street, with one man’s misery becoming another man’s fortune. In such a case, Credible Crypto highlights that XRP could be facing a bottom against BTC, which will result in a price “reversal” towards bullish. He argues that historically, “XRP/USD is on major historical support.” $0.69 has served as a significant resistance level for XRP in the period of 2020 to April 2021.
XRP and blockchain enthusiast XRP Shark emphasizes that the price of XRP in comparison to USD will show a degree of downward momentum. However, the current downside momentum of XRP/USD may lead to some positive short term upside opportunities; in order to reach a new support line, XRP needs to break resistance and disrupt the current pattern.
Ripple, SEC and Price Action
Stuart Alderoty, Ripple’s General Counsel, argues that the SEC’s lawsuit battle will not only affect Ripple, but the result will also have a “serious impact on the entire crypto and blockchain industry.”
Ripple’s CEO has slammed the U.S. for its lack of clarity around cryptocurrency regulations, which led to such an unprecedented situation for the company. While the SEC accused Ripple of selling unregistered securities, Ripple has contested that their assets are a currency.
The court has declined multiple motions from the SEC to use the co-founder’s information, communication, and personal finances against them. The SEC aimed to obtain information relating to token sales between lawyer and client, which according to Ripple, broke the client-attorney privilege.