Ripple is still treading around the area of interest visible on the 4-hour chart, still deciding whether to make a bounce or a break. Here’s a different view of the retracement play posted earlier.
A bit of a bearish flag can be noticed so there’s a chance that Ripple could break below support and test the lows at 0.1300. If not, a move back to the nearby resistance at 0.2000 could be underway. If the latter scenario happens, it could create an inverse head and shoulders pattern that is often considered a long-term reversal signal.
Of course Ripple has to bust through the pattern’s neckline to confirm that an uptrend is underway. In that case, the cryptocurrency could advance by around 0.0700 to 0.2700 which is the same height as the chart formation.
However, the 100 SMA is still below the longer-term 200 SMA at this point so the path of least resistance is still to the downside. In addition, the 100 SMA has just held as dynamic resistance and might continue to do so. The neckline is near the 200 SMA as well so there may be some sell orders at that level.
Stochastic is heading up so Ripple might follow suit while buyers remain in control. RSI is treading sideways though, signaling that further consolidation is in the cards. Once stochastic reaches the overbought zone and turns lower, selling pressure might return.
The US dollar has been tossing and turning lately due to the FOMC statement and updates from Washington. The former indicated a more cautious stance owing to the dips in CPI and retail sales while providing a sketchy timeframe for the balance sheet runoff. Meanwhile, the Trump administration is pushing forward with its reform agenda as it recently had Senate open the discussion on the healthcare repeal while the House approved the budget for increased military spending and the construction of the border wall next year.
Cryptocurrency traders are turning their attention to the August 1 day of reckoning for bitcoin as this would signal if hard fork issues are in the cards and how other digital assets like Ripple might fare when they reach the same juncture later on.
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