Ripple gained over 16% YTD
While the momentum is positive, it has yet to overcome resistance
$0.3 – $0.5 are pivotal levels for XRP/USD
This is the first important trading week of the year as three central banks (Federal Reserve, European Central Bank, and Bank of England) prepare to release their monetary policy decisions. Out of the three, the Fed’s decision is critical, as it affects the US economy and has indirect effects worldwide.
The consensus is that the Fed will increase the funds rate by 25bp this time. The risk is that it will be more aggressive – either by hiking 50bp or by delivering a hawkish message. Because markets are forward-looking, the impact of what the Fed does/says will be on the spot.
For the cryptocurrency market, the US dollar’s direction has mattered a lot lately. As the greenback weakened at the start of the trading year against its peers, it also lost ground against leading cryptocurrencies.
Take Ripple, for example. It gained +16.21% YTD, much of it on behalf of the dollar’s weakness.
What does technical analysis say about where the price might go next?
XRPUSD chart by TradingView
Ripple remains bearish while below resistance
Ripple followed Bitcoin in January and bounced from the lows. However, the bias remains bearish unless it can climb above resistance.
Three things support the bearish case.
First, the price action for the past several months is bearish, in the sense that it remained below resistance, despite the recent recovery in cryptocurrency assets.
Second, the horizontal support around $0.3 looms large. A break there puts a descending triangle in focus, and technical traders will hunt the measured move pointing to much lower levels.
Finally, since its inception, Ripple has only made a series of lower highs. No matter what the fundamentals showed, Ripple wasn’t able to climb above the previous lower high. This is bearish from a technical standpoint and deserves more attention from crypto bulls as it may signal more downside down the road.
Both for Ripple and the other leading cryptocurrencies.
