Ripple price action sours as UK inflation reminds traders of bigger picture

Ripple (XRP) price action has already printed 5% losses over the past two days as price action slips back below $0.48 in what turned out to be a bull trap. The week started on a high note, with strong earnings and stock markets rallying firmly higher. Unfortunately, reality kicked in again this morning as UK inflation numbers printed a new record high, putting pressure on the BoE to address the inflation with more aggressive rate hikes, which in turn could spark a severe recession as a massive wave of defaults  hits the already battered UK economy.

XRP price set to slip lower in the bear market

Ripple price action tanks firmly this morning as economic reality bites and Asian stocks take a step back. The turnaround in formerly positive sentiment – on the back of  strong US earnings – comes on the back of UK inflation numbers this morning, which printed another high of 10.1%. This caused the pound to come under pressure again as it means the BoE will be faced with a Sophie’s choice between either raising interest rates more aggressively to counter inflation which could tip Britain into a recession, or letting the pound go. 

XRP price thus sees traders not taking any chances and booking the small gains they made on Monday. This triggered a strong sell-off on Tuesday evening after Netflix earnings, and saw a continuation this morning that is accelerating with the wider sell-off in equities. Expect to see $0.44 being tested and possibly a slide below that 200-day Simple Moving Average (SMA). This would evaporate any hopes of breaking out of this bear market and puts $0.42 back on the map for the end of this week.

 XRP/USD Daily chart

A more bullish take could see a turnaround sparked with further positive earnings on the docket. With still some big tech names releasing earnings in the coming weeks, FAANG and Nasdaq could jump higher and pull cryptocurrencies into alignment. Expect to see a small turnaround back to $0.48 and possibly a ventured gamble to rally up to $0.50 if traders see some continuous buying in cryptocurrencies.