XRP price likely to suffer a setback as Ripple bulls rethink strategy
|- XRP price shows a lack of bullish momentum as it approaches a set of crucial hurdles at $0.469 and $0.495.
- The bearish divergence between the remittance token and the RSI hints at a potential pullback.
- Invalidation of the bearish thesis will occur if Ripple bulls overcome the $0.495 hurdle.
XRP price has been slowly climbing higher over the last few days. Due to the changing crypto landscape, bullish momentum seems to be waning for Ripple. This development suggests that a potential pullback might be brewing for the remittance token.
Also read: Ripple and SEC speculated to settle the lawsuit
XRP price needs to take control
XRP price rallied 13% between May 16 and 19 and is currently facing a resistance level at $0.469. The lack of buying pressure and the choppy outlook witnessed in Bitcoin has caused altcoins to take a rest.
Additionally, the higher highs produced by the XRP price in the last two days are contrasted by the Relative Strength Index’s (RSI) lower highs. This non-conformity is termed “bearish divergence” and often leads to a drop in the underlying asset’s price.
In this case, the bearish divergence hints that a pullback for the XRP price is likely. The likely target is $0.426, which is the first inefficiency to the downside. If the selling pressure continues to build up, Ripple is likely to visit the next inefficiency at $0.392.
These pullbacks would constitute 8% and 15% moves, respectively for holders form the current position at $0.465.
XRP/USDT 1-day chart
While the bearish outlook makes logical sense for XRP price, investors need to observe that the Awesome Oscillator (AO) has not produced lower highs. Instead, the momentum indicator has set up higher highs.
So, the bears are unlikely to have free reign. If the overall market outlook improves with Bitcoin price climbing higher, XRP price is also likely to trigger a run-up as well. In such a case, if bulls take control and flip the $0.495 hurdle into a support level, it would invalidate the bearish thesis.
This development could see XRP price attempt to collect the buy-stop liquidity resting above the equal highs at $0.548.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.