Ripple is still putting up a fight and recovering from its lows, creating a new symmetrical triangle formation on its 4-hour time frame. Price could be due for a test of resistance at the 0.2800 area from here.
The 100 SMA is still below the longer-term 200 SMA on this chart, though, so the path of least resistance is to the downside. In other words, resistance levels are more likely to hold than to get broken. Also, the moving averages appear to be holding as dynamic inflection points for the time being and keeping gains in check.
Stochastic is indicating overbought conditions, which means that buyers are already exhausted from the climb. Once the oscillator turns down from the overbought level, selling pressure could pick up and lead to another test of support near 0.2500 or even a break lower.
A break below the triangle support could lead to a drop of roughly the same height as the triangle formation. However, RSI is still on the move up to show that there’s some bearish momentum left for a few more gains.
The company behind 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.
Profit-taking off the recent declines could be attributed to this rebound, along with the dollar’s decline. Risk appetite has picked up in financial markets owing to hawkish central bank remarks, weighing on safe-haven holdings like the US currency.
Of course investors remain cautious on Ripple as the openness of the network also creates a lot of potential vulnerabilities. Some analysts have pointed out that this leaves the structure vulnerable to attacks on nodes to cripple access to users’ funds, so rallies could be limited.
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