Ripple has just bounced off the top of its descending channel on the 1-hour time frame is showing more confirmation that it’s ready to head further south. Price has formed a small double top right on the resistance and has broken below the neckline.
Ripple has also completed its correction to the broken double top neckline, which lines up with the 200 SMA dynamic inflection point. Speaking of moving averages, the 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. Price is still bouncing off the 100 SMA for now but a break below this area or the swing lows could draw more bearish pressure in.
Stochastic is still heading higher, though, so there may be some bullish pressure left for another bounce off the channel resistance at 0.1800. RSI is on the way down to signal that sellers are in control of price action and sustained bearish momentum could take Ripple down to the channel support near 0.1200.
The US dollar is mostly lower against its counterparts due to the slow progress in the Trump administration’s fiscal reform agenda. The Obamacare repeal has hit several roadblocks in Congress and is once again hitting a wall in Senate, leading Republicans to come up with Plan B.
Unfortunately this doesn’t seem to be enough for dollar bulls, and analysts are predicting that it will take much longer for the government to enact tax cuts and increase infrastructure spending. This could mean a delay in the Fed’s rate hike timeline as well, especially since they’re planning on unwinding their balance sheet later this year.
As for Ripple, the lack of industry updates has prevented it from extending its rally past the nearby resistance. Risk appetite is also dampening demand for cryptocurrencies, which typically take advantage of outflows from traditional financial markets like stocks and commodities. With that, traders could stay on the lookout for the next major catalyst before establishing a clearer direction.
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