Ripple price action erases gains of the weekend, providing an entry point

Ripple (XRP) price action is on the back foot after China closed its presidential congress, with President Xi Jinping receiving a third term. Markets did not take his renomination well judging by the theatrics that accompanied it, in which a former minister and critic both were arrested during the congress itself. It shows Xi's tightening grip on power and only points to a higher probability of a zero-covid policy and a military entry into Taiwan in the coming years.

XRP price nearing a turnaround

Ripple price action was thus on the back foot following these events, as Asian stocks fell massively, dragging other asset classes with them. This opens a window of opportunity for an entry for traders who wish to start building up long positions as XRP price action shows signs of strength. One such sign is the 55-day Simple Moving Average (SMA) crossing above the 200-day SMA. 

XRP price action is thus showing a golden cross, which often points to a longer-term bullish momentum with considerable gains on the table. Entry around the monthly pivot level near $0.45 makes sense, as a turnaround would quickly break $0.48. Once through there, $0.52 and $0.58 are up for grabs with 16% and 30% of gains on the upside.

 XRP/USD Daily chart

Risk to the downside, of course, still exists, with a few big catalyst events this week and next, such as the several central bank meetings lined up and continued threat of the use of nuclear weapons in Ukraine. That would see another reshuffle and possibly erase the gains for October with XRP price action back to $0.42. Once breaking below there, $0.37 is the next level to watch for support. Of course, that would signify the undoing of the golden cross which would prove a bull trap in the short term.