Technical Analysis and Market Entry: XRP/USD Trading At A Huge Cross-Roads Area
- The market bears are back in control, as XRP/USD drops 25% within the last six sessions.
- XRP/USD has formed a weekly evening star candlestick, which indicates a change in trend.
XRP/USD: Recent Price Behaviour
XRP has recently been attacked by the market bears, being forced to lose much ground on a promising upside run. The price has been falling for the last six days, losing some 25%, from heights of $0.3475 down to $0.2605. XRP/USD was initially trading at the highest levels that were seen since July 2019, before giving up momentum.
There was a run north for some six weeks from the beginning of 2020, which had gained a chunky 88%. The price commenced the year at depressed levels of $0.18, at the time was the lowest price since November 2017. It was also the best weekly run to the north that had been observed for some two months.
Weekly Chart View
Price action via the weekly chart view has run into a large area of supply, should be noted around the $0.3150 mark. It is of significance because XRP/USD has not traded above here via the weekly view since August 2019. The rejection and closure below do signal vulnerabilities to the downside.
The price in the above-noted loss of momentum last week has resulted in the worrying formation of an evening star. These typically come into view when the market is readying a change in trend. At present, given the current move to the south, is very much proving to be the case. A confirmation would be a weekly closure below last week’s close.
Daily Chart View
As earlier noted, the price has been on the decline for the last six days, with a further potential downside to come. XRP/USD is trading on a very pivotal area, which could launch the price to a strong recovery, or it falls below, and significant selling commences. The noted support is seen at around $0.2670. The price has used this area on a number of occasions as a cushion since 6 February.
The next potential trade is very much dependent on how XRP/USD responds to the critical4 daily support, $0.2670. Shorts would be most attractive given the noted weekly evening star formation, as the price is heading for a closure below last week’s close. A break and closing via the daily below $0.2670 would be ideal for an entry to the downside. Targets would be $0.2500, $0.2150 and then $0.2000. Stops would be placed at $0.2830.
Should the price manage to see a nice strong bounce off the noted daily support, then upside may be eyed. XRP/USD would need to break back above a supply area ahead, $0.2800-0.2900. Longs would then be engaged, with targets at; $0.3150, $0.3400 and then $0.3650.
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.
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