Technical Analysis and Market Entry: XRP/USD Subject to Another $0.2000 Test

  • XRP is stuck within a bear market, trading around the lowest levels since December 2017.
  • The psychological $0.2000 is at risk of another bear attack, given the recent technical pattern breakout.

XRP/USD: Recent Price Behaviour

XRP remains within-firm control of the market bears, as the price trade down around the lowest levels since December 2017. The price has been dropping consecutively for some four weeks, dropping from heights of $0.3150 down to $0.2000. It has lost as much as 35% within the noted period, the worst run of weekly losses since August.

The detailed downside pressure had picked up pace following a bearish flag pattern breakout; sellers forced the breach earlier in the month. It came following the best run observed since October 2018, before falling victim again to another bear attack. XRP has ultimately been stuck within a trend to the downside, since it peaked at its all-time high print in January 2018.

Any rallies seen for XRP/USD are sold, which is a strong indication that the bear market is still active. Should the bulls have been in control, pullbacks in the price would have been highly attractive for buyers. However, the buying momentum is still very much limited to the upside. There appears to be a lack of conviction when the price is able to gather some near-term buying interest.

Weekly Chart View

Price action is trading just underneath a critical weekly level of resistance, $0.2250. It is an area which has on several occasions previously proven to provide strong support. However, given the price has slipped below, it will now likely act as a stubborn barrier. Given the described breach, it does make the psychological $0.2000 vulnerable to downside risks.

XRP/USD weekly chart.

Daily Chart View

XRP/USD between 26 – 29 November was able to produce a near-term short-lived rally, following harsh losing streak through much of November. The steep selling was on the back of a breached bearish flag formation, which the price was moving within. XRP had been trading within the confinements of the pattern, prior to a breakout to the downside.

XRP/USD daily chart.

4-hour Chart View

In the latest session at the time of writing, XRP/USD has broken out to the downside from an ascending wedge structure. Another wave of selling pressure has come into play, after a brief period of consolidation following the bounce at $0.2000 in the prior week. The exposure of the wedge now brings back into play a $0.2000 retest.

XRP/USD 4-hour chart.

Trade Recommendation

Given the earlier described near-term wedge breach, further momentum to the south appears likely. Targets seen at; $0.2000, $0.1700 and then $0.1500. Stops to be placed just above the noted pattern at $0.2450.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Ken has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.