It’s been quite a while since most cryptocurrencies posted tremendous gains. Major coins such as bitcoin, bitcoin cash, and bitcoin sv are up by over 15 percent.
Other coins in the top ten were not far behind, with litecoin and ethereum printing close to ten percent gains.
The rising tide appears to be lifting all boats except for ripple (XRP). While almost every other cryptocurrency is going bananas, XRP is underperforming as it posts modest gains below three percent. This comes at a time when excitement for the annual Swell conference is building.
Is the third-largest cryptocurrency in trouble? Here are three reasons why “The Standard” is sitting out the crypto rally.
Peter Brandt, perhaps the most followed crypto trader on Twitter, predicted that XRP would bottom out once it moves above resistance at $0.3038. According to the analyst, the breach of this level will catapult the cryptocurrency as high as $0.46912.
There’s a reason why Peter Brandt chose $0.3038 as a critical level to take out. The last time XRP breached $0.30, the cryptocurrency skyrocketed to its all-time high.
The $0.30 mark is such a pivotal level for “The Standard” that the bulls defended it for about a year, from August 2018 to August 2019. Unfortunately, the previous support has now turned into a durable resistance.
So far, it appears that the bears are doing a great job controlling their territory.
In technical analysis, the strength of a support or resistance area is sapped with each tap. Over the last month or so, bulls have tapped resistance of $0.30 on three occasions. This may indicate that resistance is crumbling, prompting Brandt’s optimistic forecast.
More importantly, the price action over the last month has allowed ripple to paint an inverse head-and-shoulders reversal pattern on the daily chart.
Based on the uptrend line, the cryptocurrency could generate a higher low at $0.28 to form the right shoulder. That hypothetical higher low setup from Brandt’s analysis would put enough pressure on resistance of $0.30 that a breakout wouldn’t come as a surprise.
Until that happens, it is likely that bears will have the upper hand.
In the last few months, the cryptocurrency traded within a descending channel. Last week, ripple managed to take out the downtrend line of the channel when it breached resistance of $0.28. This enabled the crypto token to rally to as high as $0.31533 today, October 26th.
However, bottom pickers who bought below $0.24 appear to be using this rally to take profits. As a result, the breakout rally is fading.
The good news is that the pullback allows ripple to retest resistance of $0.28 into support.
The cryptocurrency may sit out today’s rally, but if Brandt’s analysis is correct, it’s very likely that the tide will eventually arrive and lift XRP’s boat.
Disclaimer: The above should not be considered trading advice from CCN.com. The writer owns bitcoin, ethereum, and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.
Last modified: August 10, 2020 6:44 PM UTC