XRP price analysis for May 12-17: coin likely to consolidate in a tight range
XRP has held the critical support level at $0.17 but it is struggling to move up. This points to a possible consolidation in the next few days.
Ripple claims to be the first distributed ledger technology-focused company to have become a member of the ISO 20022 standards body, which formulates the standard that is used between global financial institutions. This marks Ripple’s entry into a group that has central banks, commercial banks, and payment processing entities like SWIFT and Visa.
A new report by blockchain intelligence firm Flipside Crypto indicates that XRP activity drops significantly on the weekend. The firm speculates that this could be because the “majority of XRP transactions are sent by professional investors or payment processors such as MoneyGram and Intermex”.
Let’s analyse the weekly chart to project the long-term picture and use the daily chart to forecast the possible move this week.
XRP price technical analysis: weekly chart
The bulls failed to capitalise on the break above the 20-week EMA and, as a result, 0'>XRP closed (UTC time) down 10.21 per cent last week. The 20-week EMA has started to slope down once again and the RSI has dipped back into the negative zone. This suggests that bears have the upper hand.
However, the mild positive is that the bulls are attempting to form a higher low closer to $0.17 levels. If this level holds, the bulls might make another attempt to push the price towards the downtrend line of the descending wedge. The bears are likely to defend this level aggressively, which can result in a minor consolidation or correction.
Conversely, if the bears sink the XRP to USD pair below the $0.17 support, a deeper correction is likely.
The technical analysis of the XRP weekly chart suggests that buying dries up at higher levels. Therefore, the altcoin is likely to spend some time in consolidation before making a decisive move. Let’s study the daily chart to spot the critical levels to watch out for.
XRP price technical analysis: daily chart
0'>XRP plunged on May 10 and broke below both moving averages to hit an intraday low of $0.1759. However, the mild positive is that the bulls defended the support at $0.17. This helped the altcoin recover and close (UTC time) above the 50-day SMA.
The bears again dragged the price below the 50-day SMA on May 11, but the bulls managed to recover and close (UTC time) above it. Currently, the bulls are attempting to push the price towards the 20-day EMA, which is likely to act as a stiff resistance.
The 20-day EMA has started to slope down and the RSI has dipped below the 50 levels, which suggests that bears have the upper hand. A breakout of the 20-day EMA will be the first indication of strength.
Conversely, if the price turns down from the current levels and sustains below the 50-day SMA, the bears will once again try to sink the pair below the critical $0.17 support. If successful, the trend will turn in favour of the bears.
What are the possible trade setups this week?
XRP is not showing any reliable buy setups at the current levels. The price has been trading close to the 50-day SMA since the sharp fall on May 10, which suggests a lack of urgency among the bulls to buy at these levels. Hence, traders can step aside until a new buy setup forms.
FURTHER READING: 'Unclear' whether XRP is a commodity or a security - CFTC Chair
FURTHER READING: What is XRP? Your simple guide to Ripple’s cryptocurrency