Ripple price on Tuesday appreciated 23 percent against the US Dollar owing to strong fundamental factors.
The XRP/USD has risen from its intraday low near 0.26699-fiat to retest its September 5’s lower high near 0.32994-fiat. The pair yawned through the early Asian trading session, consolidating sideways within a stiff range. The upside momentum began building only when the European markets woke up. And, quite abnormally, XRP/USD jumped violently during the mid-session, forming one higher high after another. And as the US session comes into play, the pair has already established a new intraday high near 0.32859.
The Ripple fundamentals are too strong to ignore. However, they have delivered a rally that is too unstable. There could be a possible sell-off if those with long positions towards near-term upside targets start exit on high intraday profits. Nevertheless, in long-term, Ripple has psychologically established itself as a major blockchain giant which could assist the value of XRP tokens.
The abnormal rally has already done a breakout action on the long-term descending triangle, substantially switching the bias from bear to bull within a matter of hours. XRP/USD is now on the verge of completing an inverse head and shoulder pattern, with its head at 0.225349-fiat and neckline towards 0.33708-fiat. There is an absolute possibility of neckline to shift further north, should the bull action continues to break key resistance levels. Our best bullish guess is XRP/USD retesting 0.35720-fiat, August 28’s peak level, in medium-term.
The pair is already above its 50H, 100H, and 200H SMA while the RSI has entered its overbought region. The Stochastic indicator, though bullish, has slowed down near the overbought borderline. This could mean a potential reversal, which is further visible in the RSI indicator.
Ripple Labs, the company behind the XRP token, gained a new member for its flagship blockchain network in The National Commercial Bank. Saudi Arabia’s first established bank will use RippleNet, Ripple’s enterprise blockchain network, to do instant international payments. The partnership paves way for Ripple Labs to establish its market in Saudi Arabia, a country of one of the largest migrant workers population. And, with the National Commerical Bank, the blockchain company expects to access its 5 million users for a potential XRP adoption.
We will initially be expecting a run towards 0.33708-fiat before XRP/USD decides on whether it wants to attempt a breakout or a pullback action. That said, we are long on 0.33708-fiat as far as our intrarange strategy is concerned. A breakout would have us put a long position towards 0.35386-fiat, the 100% Fibonacci level of the last swing from 0.35386-high to 0.25349-low. In this position, a stop loss circa 4-pips below the entry point should minimize our losses in case a dumping action appears.
A pullback will have us switch back to intrarange, which would mean placing a short towards the interim support. It is near 0.32326-fiat for today.
An extended breakdown action, in the meantime, will have us switch to a wait-and-watch approach. It could potentially be a dump, and we would avoid catching a falling knife.
Featured image from Shutterstock. Charts from TradingView.