XRP Analysis

This week was marked on the economic calendar by last Wednesday’s US interest rate announcement, in which the FOMC decided to raise rates to 3.25% as planned, but with higher forward projections, as the measures taken so far have failed to curb rising inflation.

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This news caused an increase in volatility in the markets, but in the case of the crypto market, this increase in volatility did not have a fixed direction, but became a back and forth movement, which is clearly seen in the $BTC chart and continues to respect the support zone, but remains immersed in that long-term downtrend.

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On the other hand, BTC Dominance fails to create higher highs and rebounds slightly from 42%, remaining in the lower part of the side channel that we have already discussed in other posts.

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This correlation between both graphs leaves us with a general situation with quite a bit of variation, in which we see tokens such as $FXS or $QUICK losing more than -15% weekly, while $ETH and $BTC are approaching the weekly close by -4% and other tokens like $ALG or $XRP register very positive results of 25% and 30% respectively.

The case of $XRP is not surprising, since it is one of those tokens that usually make upward movements that are decorrelated from the market, but it seemed remarkable to me to analyze this movement that was generated in just under two days.

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If we pay attention to the chart, we can see how there is a bearish trend since April 2021 that has taken that sequence of descending highs and lows until it found a bottom at $0.29/$0.30, where it began to create a lateral channel between this support ($0.29) and the first resistance zone we found was at $0.40/$0.41.

If we enlarge the 4h candlestick chart we see how during this week, the price managed to break that resistance area (which coincided with the downtrend line), to later create a pull-back to the broken resistance and generate a bullish replica that it has taken him to $0.55, more than 40% in less than two days.

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This move has met the sideways channel target and has generated a rejection from $0.55, which was a support zone at the end of 2021 and has currently acted as resistance, leaving us with a situation with two relevant zones to keep in mind in the short term. If the price continues to move lower, the broken resistance at $0.40 could act as support, confirming the break of the trendline if it subsequently manages to make a new high. Although that resistance at $0.55 could pick up strength if price fails to make that new high, leaving us with a new range to watch that could be decisive for $XRP’s medium-term future.

Should this $0.40 area fail to support the price, it would be likely to see bearish aftershocks, as we would see the price get back into this downtrend.

If we go back to the daily chart, we can detect another zone of much confluence at $0.88, which is the long-term resistance and the one that would determine the end of this bearish cycle. Although this area is still far away from current prices, it is the reference to be taken into account for the long-term future.

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Another detail to note is the bullish crossover of the RSI on the daily chart, which if it manages to maintain this high area with high volume in the coming days, could generate that replica that I mentioned above and that can test again that resistance of $0.55, although remember that the underlying trend remains bearish as long as they do not generate rising highs and lows.    

Finally, remember that nothing discussed in our articles can be considered as investment advice. Everyone must do their own analysis and develop their own trading strategy. The Belobaba Crypto Fund team only shows our analysis and investment tools, and how they help us in our operations when making decisions.