Trade Recommendation: Ripple

Ripple (XRP/USD) has been the strongest big cap cryptocurrency lately. Even if Bitcoin Cash (BCH/USD) made some big moves last week, Ripple kept in pace as it made breakouts of its own. On November 6, 2018, XRP/USD took out resistance of $0.50 and climbed as high as $0.562.

This was an important breach as $0.50 used to be the market’s parabolic support. Ripple skyrocketed on December 14, 2017, when it went above $0.50. It was flipped into a key resistance on June 22, 2018, during the height of the bear market. XRP/USD has been trying ever since to take it back for good. Today might be the day it does so.

Technical analysis shows that Ripple is currently retesting support of $0.50. We believe that bulls will hold for the following reasons.

First and most important, the 200-day moving average (MA) just crawled below the daily candle. This is a huge development. Moving averages act as supports or resistances depending on whether they’re below or above the candle. So instead of looking up and finding strong resistance in the 200-day MA, it is under the daily candle, giving it a very nice boost.

In addition, $0.50 is a key psychological level. If the market is above it, it becomes a demand zone. On the other hand, if Ripple is below it, it becomes a supply area. Right now, Ripple is around that level.

Almost no one’s selling at these levels because participants know it is a buy zone. With no one selling, positions are scarce, hence the low volume.

The strategy is to buy at the current price of just under $0.50. If Ripple successfully completes the retest, the market will likely break out of the triangle and 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 $0.49475 on Kraken.

Summary of Strategy

Buy: Current price of $0.49554.

Target: $0.70

Stop: $0.47

 

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.