Ripple made a convincing upside break of its descending triangle pattern recently thanks to a weakening dollar and bitcoin. The chart pattern spans 0.1400 to 0.4000 so the resulting rally could be of the same size.
The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. In addition, Ripple broke past the 100 SMA dynamic inflection point to signal stronger bullish momentum. Three white soldiers have also formed, which is also a strong bullish signal.
Stochastic is pointing up to indicate that buyers are in control of bitcoin action. RSI is also on the move up so bitcoin might follow suit. However, both oscillators are nearing overbought levels to indicate rally exhaustion. In that case, profit-taking could happen and take bitcoin for a pullback to the nearby support levels.
Potential correction levels are located at the 100 SMA dynamic inflection point and the broken triangle resistance around 0.2200 and 0.2000, respectively. A larger pullback could find support at the triangle bottom around 0.1400 or the 200 SMA dynamic inflection point.
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.
Bitcoin has taken a hit recently when rival bitcoin cash started gaining more mining power. This could lead more exchanges to accept this version of the cryptocurrency and revive incompatibility issues or complicate the upgrade to SegWit.
Meanwhile, the dollar could also keep falling due to ongoing tensions with North Korea and within the White House. The joint military drills of the US and South Korea prompted a response from Pyongyang threatening to push through with their threat of launching a missile strike if the provocations continue.
The Trump administration continues to deal with the fallout from the President’s handling of the Charlottesville violence but officials have stressed that they would continue to push forward with their fiscal reform agenda.
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