After a draining year, Ripple (XRP) bulls could be poised for a rally and subsequently bounce back from 2019 lows. Although prices are stagnant week-to-date, events in the daily chart could be well supportive of upsides. Observed, XRP prices are now trending above the 20-day moving average, a flexible resistance line, 30 days after the distribution and collapse of early November.
Moving Averages in Trading
A lagging indicator, traders note how prices relate to moving averages. There are several patterns that when considered in any timeframe, and more importantly in the daily or weekly chart, are indicative of swing and long-term traders.
The Death Cross and Golden Cross are some of the common patterns associated with MAs, pointing to a price collapse and recovery, respectively.
At present time, the breach and close above the 20-day Moving Average at the back of increasing trading volumes could be supportive of XRP prices, which has been bludgeoned in the last couple of months.
The Case of XRP Bulls
Even so, for bulls, caution must be taken. First off, sellers are technically in charge from an effort versus result point of view. Despite the attempt for bulls over the weekend, bulls are yet to muster enough momentum and reverse the strong downtrend registered from Nov 22 through to 25.
In this case therefore, the re-bounce and close above the MA could well be a retest and another opportunity for traders to sell the pullback with targets at 20 cents or Nov 25 lows. Admittedly, that could be the case judging from price action.
However, on the flip side, there is a series of higher highs as visible when Bollinger Bands (BB) are pasted on the daily chart. Unconfirmed, they point to an accumulation in lower time frames.
In a market that remains fragile and with comparably low liquidity, over-supply leads to suppressed prices, preventing traders and holders from profiting despite supportive fundamentals.
Ripple Inc. Turning Away Institutions, Directs Them to The Retail Market
It was recently reported that Ripple Inc., were turning away institutions willing to buy XRP directly through OTC and programmatic sales as per their Q2 2019 reports. By turning them to the retail market and instead focusing on building strategic partnerships in their areas of high potential such as EMEA and SE Asia, holders of XRP are most likely to benefit from institutional demand.
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Dalmas is a very active cryptocurrency content creator and highly regarded technical analyst. He’s passionate about blockchain technology and the futuristic potential of cryptocurrencies and enjoys the opportunity to help educate bitcoin enthusiasts through his writing insights and coin price chart analysis. Follow him at @dalmas_ngetich