Ripple image - Ripple XRP Price Weekly Technical Analysis, November 6th

Ripple XRP Price Weekly Technical Analysis, November 6th

XRP/USD is trading well below its breakout highs and was also affected mildly by the sell-off in the major cryptocurrencies which took place late last month. What is the expected outlook for Ripple as we head into the last two months of the year?

Fundamental Outlook

Ripple Labs, the parent company behind the XRP token, has announced plans to open an office in Dubai at the end of 2018. It has also announced that 200 institutions have signed up to start conducting financial transactions using XRP, principally in the area of cross-border payments. The opening of the Dubai office is expected to enable the company focus on the MENA region, where it says the need for its services are greatest and where the majority of the institutions that will work with XRP are located.

This is not entirely surprising. The UAE is one of the countries that are working to use the blockchain to enable its government to become 100% digitalized in 2019. This news is expected to have a long-term effect on the XRP token and may not have an immediate impact on prices.

Technical Outlook

Following the bullish breakout that occurred in the 3rd week of September, prices have cooled off somewhat, with XRP/USD retreating to previous support levels last seen in April and June 2018. Price is currently testing this area, which is at a price level of very near 45 cents as seen in this weekly chart below.

image1

XRP/USD Weekly Chart: October 28, 2018

The key price levels on this chart are:

  1. The immediate support which is seen at the $0.4493 price level.
  2. The next support level at the $0.2798 price area.

These areas represent the long-term support levels. But between these price levels, there are other minor resistance and support areas, which are best visualized on the medium term charts. On the daily chart below, we see the following:

image2

Daily Chart for XRP/USD: October 31, 2018

There are basically two key points to take away from this chart:

  1. There is a descending resistance line which is expected to intersect the current support line to form a descending triangle. With price action already looking squeezed, the descending triangle may resolve within the next week or two.
  2. There is a medium-term support level below current price levels, and this is located at the 35 cents area.
  3. We then have the long term support of the weekly chart, also visualized on the daily chart at the $0.2798 price level.

With the information on the weekly and daily chart, what can we say about the XRP/USD pair going forward?

Trade Scenario 1

The price action candles are testing the immediate support level seen on the weekly and daily charts at the $0.4492 price area. The bearish sentiment that has pervaded the cryptocurrency market and which was highlighted in the selloff of Monday October 29, has put this support area under heavy pressure. The picture on the daily chart corroborates this setup, and if the descending triangle resolves in the expected direction (with a breakdown of price at this level), then we can expect to see a selloff in XRP/USD, targeting the medium term support at the 35 cents price level.

Trade Scenario 2

In furtherance of the 1st trade scenario, another trade scenario would be for price action to break the 35 cents medium-term support if the bearish sentiment in the market persists. If this support level is broken, then the door would be open for price to make a move downward to the long term support (support 2 on the weekly chart) at the $0.2798 price level.

If the medium term support of 35 cents holds, then price may remain within the new range now formed by this support area acting as the floor, and the broken $0.4492 support line acting as the ceiling. Further price movements will then be determined by market events.

Trade Scenario 3

A more unlikely scenario would be for some positive news to hit the markets, or for Bitcoin to experience a price rally. This may then allow the immediate support at $0.4492 to hold firm, providing a fulcrum for prices to start to push back upwards. However, current market sentiment and the fundamentals of the Ripple asset do not provide very strong reasons for this scenario to occur. Therefore, this scenario is less likely to occur than the previous scenarios described.

Market Sentiment:

The long term, mid-term and short term outlook of the XRP/USD pair is:

  • Long Term – bearish
  • Mid-term – bearish

Disclaimer

Please note: this analysis was done on a weekly chart. It takes a whole week for a candle to form, so these moves may take several weeks to play out. Entries should be made on shorter time frame charts such as the daily chart.

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