Ripple price analysis 22 Nov: correction may deepen further
Ripple may witness sharp selling below the trend line
Ripple (XRP) has been embroiled in a lawsuit with the US Securities and Exchange Commission (SEC) for the past few months. Ripple executives have been vocal about the need for regulatory clarity on several occasions as a result.
The company recently posted its vision of “a pragmatic regulatory framework for cryptocurrencies, blockchain-enabled payments and digital assets.” Ripple said the regulations should support innovation and growth in the fast-growing crypto and blockchain sector, and at the same time provide consumer and market protection.
“The current uncertainty in the US regulatory landscape discourages innovation and could cause a ‘brain drain’ in the cryptocurrency and blockchain space,” Ripple said.
“In order to incentivise innovation and inform the development of a clear and consistent regulatory framework for cryptocurrencies, we believe innovation sandboxes should be encouraged,” the company added.
Could XRP go up through bottom fishing by investors, or could negative sentiment in the crypto sector aggravate selling?
Read the XRP price analysis to find out what the charts suggest.
Ripple technical analysis: weekly chart
The bulls are currently attempting to defend the 20-week exponential moving average (EMA). This is an important support to watch out for in the short term because the pair has rebounded off it on two previous occasions, marked via an ellipse on the chart.
If the price bounces off the current level, it will indicate that the bulls continue to buy in response to this support. The bulls will then make one more attempt to push and sustain the price above the down-trend line. If they succeed, it could signal the start of a new upward trend.
Ripple technical analysis: daily chart
XRP’s price broke below the moving averages on 16 November and found support at the trend line. The buyers pushed the price back above the moving averages on 18 November but could not sustain the higher levels, as seen from the long wick on the day’s candlestick.
Since then, the XRP/USD pair has been trading between the 50-day SMA and the trend line. The down-sloping 20-day EMA and the relative strength index (RSI) in the negative territory indicate that the path of least resistance is to the downside.
If the bears sink the price below the trend line, selling could accelerate and the pair may decline towards the next major support at $0.85. This is an important support for the bulls to defend because a break below it could result in panic selling.
Contrary to this assumption, if the price rebounds off the current level, the bulls will make one more attempt to push the pair above the moving averages. Such a move will be the first sign that the selling pressure may be reducing.
The bulls will have to drive the price above the down-trend line and the $1.35 overhead zone to indicate the start of a possible new trend upward.
Ripple: Buy or sell at current levels?
Ripple’s price analysis shows that a break and close below the trendline could extend the decline to the target objective at $0.85. The bulls will have to push and sustain the price above the moving averages to negate the short-term bearish view.
Whatever the outcome might be, your decision to trade depends on your attitude to risk, your expertise in this market, the spread of your investment portfolio and how comfortable you are about losing money. This analysis does not constitute investment advice. It’s important to make your own analysis before deciding to invest. You should never invest more than you can afford to lose.