Ripple failure to breakout opens room for 20% drop

Fibo Quantum

  • Ripple price action popped higher but failed to break $1.10.
  • With price action fading, the downtrend is still respected, making bulls trapped in their longs. 
  • A retest of $0.84 looks inevitable, with bears defending the downtrend.

Ripple (XRP) price action got some support from bulls who attempted to break the downtrend going on since September. With a false breakout above the blue descending trend line, bulls got caught in a bull trap. Bears will seek to drive price action lower toward $0.84, the low from August.

XRP price action keeps the downtrend intact, with bears still in control toward $0.84

Ripple (XRP) bulls attempted to break out of the downtrend from September but failed with a false breakout on Sunday above the blue descending trendline, the northern start for bears in XRP price action. With that false break, bulls have not been able to push price action above $1.10, and the price has started to fade to the downside. Bears will try to push price action further down with their entries on that descending blue trend line. 

XRP bulls will want to try a second time, with the 55-day Simple Moving Average (SMA) coming in at $1. Looking at its past importance, that 55-day SMA does not hold very much credibility in XRP with price action not respecting it, whether to the upside or the downside. Bulls will get stopped out of their entries at $1.10, and new entries at $1 will be short-lived.

XRP/USD daily chart

Bulls in XRP price action will start to back off, and bears will have a smooth ride toward $0.84 by the end of next week. That level was low from September and will act as support for a second time, after it acted as a launching path for the rally on September 9 and 10.

With market sentiment ready to shift anytime back to risk-on, expect bulls to pick up quicker than foreseen, which might weaken bears and make $1.10 vulnerable again.

 

 


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