XRP Bears Attempt to Regain Control (1)
January 5th 2018, was the beginning of the relentless decline for Ripple (XRP), closing 2019 as the worst-performing cryptocurrency of the year. After what looked like a promising start to 2020 (Jan & Feb) XRP resumed its downtrend after failing at the 21st July 2019 highs. By March of this year, partly due to the coronavirus pandemic XRP re-visited the lows of July 2017 (mid 12s). Other more meaningful factors could also have contributed to XRP’s poor performance, earlier this year Ripple CEO Brad Garlinghouse noted that ‘Ripple would not be profitable or cash flow positive without selling XRP, suggesting that its XRP sales were, in fact, helping to finance the business’. With all this in mind, knowledgeable Ripple investors are bound to have a pessimistic outlook regarding the future price of Ripple.
Long term small speculators, on the other hand, are heavily long, probably holding onto losses hoping for a turnaround. Short term sentiment amongst small participants is 91% short on the day at the time of writing. Dual resistance at (1) could provide a good selling opportunity, at least for the short term. However, it’s worth noting that over the past 3 days we have held above the all-important 200 period daily moving average, with resistance just overhead, indicating prices may consolidate sandwiched between these two important support and resistance levels. A clean break above resistance (1) should ramp up buying pressure, alternatively below the 200 DMA hands it back over to the bears.