Trade Recommendation: Ripple

Our April 2, 2018 trade recommendation for the Ripple/US Dollar pair (XRP/USD) hit its mark on April 13 when it went as high as $0.70813. Those who bought positions when the recommendation was released grew their investments by over 41%.

While the pair was able to go above our target, we expected that the rally wouldn’t be sustainable. Our expectations were met on May 9, 2018 when XRP/USD broke $0.80 support. This started a waterfall event as those who bought above $0.80 rushed to cut their losses.

XRP/USD has looked bearish the last couple of months. The good news is that a rally may be in sight.

Technical analysis show that XRP/USD may be bottoming out at $0.45 support. This view comes after the pair went as low as $0.42411 on June 29 but bulls managed to lift the market above the support. In addition, the pair is coming off a strong bear run that generated two bearish flags and one bearish pennant. Based from experience, bears are very likely to be exhausted after the third push down.

Furthermore, technical indicators are flashing bullish signals. A long bullish divergence can be spotted on the daily MACD along with a bullish cross. Plus, the 4-day, 8-day, and 21-day moving averages are below the daily candle trending up.

The strategy is to buy as close to $0.45 possible. If bulls can hold on to the support, they will spark a strong rally to our target of $0.70. The process may take a month.

Daily Chart of Ripple/US Dollar on Kraken

As of this writing, the Ripple/US Dollar pair is trading at $0.4968 on Kraken.

Summary of Strategy

Buy: As close to $0.45 as possible.

Target: $0.70

Stop: $0.42

 

Disclaimer: The writer 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.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.