- Ripple prices made a false breakout yesterday drawing in many investors who woke up this morning with mounting losses.
- XRP price action looks heavy this morning as investors reassess the situation in current markets.
- With price action back into the pennant, expect a possible bearish tone and a possible nosedive below $0.78.
Ripple (XRP) price hurt investors yesterday after shooting above the 200-day Simple Moving Average (SMA) at $0.95, only to then fall back down again soon after The breakout lured many bulls in but in the late US session price collapsed, and XRP fell back into the pennant price pattern. After what seems to have been a bull trap investors are likely to cut their losses leading to an accelerated move down towards $0.62, should support at $0.78, not hold.
XRP sees bears seize control again leading to possible 25% devaluation
XRP price had a strong case for a bullish outbreak yesterday, and investors jumped on the back of a breakout of a pennant in two phases - firstly when it exited the pennant and then when it broke above the 200-day SMA. But price action collapsed in the late US trading session, hurting traders who had got in at the 200-day SMA. Now XRP price looks to be on its way down to the bottom of the pennant, leading to even more bulls fleeing the scene and cutting their losses..
XRP will likely see buying activity dry up as bulls sell their positions on the way down, near $0.78. A historical pivot level and the monthly S1 support level should provide some support at that level. If XRP price breaks below there, expect an accelerated move to the downside as more and more investors try to sell their stack in Ripple coins, in an attempt to get out of their losing positions.
XRP/USD daily chart
Once below $0.78, there is not much in the way of support, so expect a quick nosedive towards $0.62, – the first element of support where bears might start to take profit. Depending on general cryptocurrency sentiment, expect possibly even a dip further towards $0.58. The only way this nosedive correction could be avoided could be, for example, if the US inflation print this afternoon surprises to the downside, which would lead to a sigh of relief among investors, and potentially result in a bullish knee jerk reaction back to $1.05.
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