XRP price action sees traders fear Thursday inflation number
- Ripple price action goes nowhere as the gains from Friday evaporate over the weekend.
- XRP price action sees traders looking for support as the selling action took over as of Saturday.
- Expect a possible decline of another 8% toward Thursday as traders fear the US inflation print.
Ripple (XRP) price action sees traders being pulled off their pink cloud from last week as stocks and cryptocurrencies rallied rapidly in the aftermath of the US job numbers. Markets saw the lower-than-expected figure as an element that could point to the Fed not being forced to keep hiking at the current pace.
However, considering the hawkish press conference from Powell, traders are starting to think that the Fed is preparing markets for another jump in inflation numbers, breaking the 40-year high currently in the books, which would mean that the current economic backdrop is still very much at play.
XRP price set to break below support
Ripple price action is currently seeing its support coming under pressure as the sell-off continues this Monday morning, giving back almost all the gains from Friday.
That traders are pulling out that quickly is not good news. Seeing the element that European and US indices are on the back foot, expect this to weigh on XRP price action. More downside could be holding roughly another 8% of losses should the important supportive factor break and give way to the bears.
XRP price action uses that supportive factor given by the 55-day Simple Moving Average (SMA), underpinning the price action last week on three occasions. Seeing the additional element that the 55-day SMA moved above the 200-day SMA, some bullish signs were spotted. As long as the 200-day SMA is not moving higher though, that long-awaited Golden Cross is not happening. Thus risks of sudden breakdowns in the price action will still occur on regular occasions.
XRP/USD daily chart
The other scenario is quite simple as binary: the 55-day SMA holds support and provides bulls a new entry level to build upon. That would mean that a bounce occurs as price action remains underpinned at $0.46 and pushes price action back to $0.48. Look for a test and break again above $0.51, as that would mean new highs are possible, while lower highs could point to a simple squeeze to the downside.
Author
Filip Lagaart
FXStreet
Filip Lagaart is a former sales/trader with over 15 years of financial markets expertise under its belt.
