Ripple price analysis 28 Dec: could the downtrend resume?
Ripple may trade sideways in the short term
Ripple’s ongoing legal issues with the US Securities and Exchange Commission (SEC) have not dented its operations. Brad Garlinghouse, CEO of Ripple, recently tweeted that 2021 was the company’s strongest year ever.
Transactions over RippleNet have doubled since the third quarter of last year and international on-demand liquidity volumes soared more than 25 times during the period.
Garlinghouse also highlighted that all the growth came from outside the US. New On-Demand Liquidity corridors like Japan and UAE opened up and partnerships with Bhutan and Palau were undertaken for the central bank digital currency solution built on a private version of the public XRPL.
However, some investors continue to avoid buying XRP due to the ongoing lawsuit. The chairman of O’Shares Investments and Shark Tank star Kevin O’Leary told CNBC that he doesn’t own XRP because he has “zero interest in investing in litigation against the SEC. That is a very bad idea”.
Could Ripple’s strong performance attract buyers and will XRP go up? Read the XRP price analysis to find out what the charts suggest.
Ripple technical analysis: weekly chart
The long wick on last week’s candlestick suggests that bears continue to sell on rallies. The 20-week exponential moving average (EMA) continues to turn down and the relative strength index (RSI) is just below the midpoint, suggesting a minor advantage to bears.
If the price sustains below the 20-week EMA, the bears will attempt to sink the pair to the support line of the triangle. A break and close below the triangle will suggest the resumption of the downtrend. The pair could then plummet to $0.51.
Contrary to this assumption, if the price turns up from the current level and rises above $1, it will suggest that demand exceeds supply. That could clear the path for a possible rally to the resistance line of the symmetrical triangle.
The bulls will have to push and sustain XRP’s price above the triangle to signal the start of a new uptrend. The pair could then start its journey toward $1.95.
Ripple technical analysis: daily chart
XRP’s price broke and closed above the 20-day EMA on 20 December and raced to the 50-day SMA on 23 December. The bears defended this level aggressively, resulting in a pullback to the 20-day EMA.
Although bulls successfully defended the 20-day EMA between 24-27 December, they could not push the XRP/USD pair above the 50-day SMA. This suggests that demand dries up at higher levels.
The bears renewed their selling today and have pulled the price back below the 20-day EMA. If the price sustains below this level, the pair could drop to $0.74.
On the contrary, if the price turns up from the current level and rises above the 20-day EMA, the suggestion will be that traders continue to buy on dips. The bulls will then make one more attempt to clear the overhead hurdle at the 50-day SMA.
If they succeed, it will suggest a possible change in the short-term trend. The pair could then rally to $1.25.
Ripple: Buy or sell at current levels?
Ripple’s price analysis suggests that bears are aggressively defending the 50-day SMA. The bulls will have to sustain the price above this resistance to signal a stronger recovery to $1.25. If the price sustains below the 20-day EMA, the selling could intensify and the pair could drop to $0.74.
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.