Ripple has bounced off the symmetrical triangle resistance as highlighted in the previous article, making its way back down to test support. A bounce off this area could lead to a move back to the top but technical indicators are hinting that further losses are possible.
For one, the 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. In other words, a break lower could be more likely to happen than a bounce or a break higher. Also, stochastic is still pointing down to indicate that sellers are still in control of Ripple price action.
RSI has more room to head south so Ripple might follow suit. The triangle spans 0.1500 to 0.3500 so the resulting selloff could be of the same size, taking price down to 0.0500 on a breakdown. Other support areas are located at 0.2300 and at 0.1500.
Meanwhile, a break higher could take Ripple up to 0.5000 but this would require a really strong market catalyst to sustain. This particular cryptocurrency seems to be preferred by the banking industry over other virtual currencies like bitcoin.
Ripple is focused on building a better bitcoin as it wants to handle transaction volume on a higher scale. The company approaches banks with its enterprise software, along with the Interledger Protocol. They propose a corresponding banking paradigm in which banks with no direct relationship rely on intermediaries in order to send payments to each other.
Apart from that, dollar price action could also dictate the other half of XRPUSD behavior. Fed officials have hinted that they could start unwinding the balance sheet by September, which could dampen the odds of a rate hike then and push it back to December. In that case, the dollar could give up ground to its peers as investors start doubting that a third rate hike will be in the cards this year.
Overall market sentiment should also determine dollar direction moving forward, with the pickup in risk aversion and the drop in commodity prices seemingly favoring the US currency across the board these days.
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