Last week, I wrote a piece that noted the recent spike in the Ripple (XRP) price. From the levels at the time, just above the $1 barrier, a forecasted 24% return potential was seen. As I write, the current price sits at $1.23.
Reasons for the move higher
The main thrust of the viewpoint from last week came from both fundamental and technical drivers. Recent news at the time showed how GME Remittance joined the RippleNet platform. As South Korea’s largest non-bank payment provider, and with key partnerships with APAC situated banks, it’s a great way for Ripple to get into this part of the world.
From a technical angle, the Ripple (XRP) price had broken through key resistance levels already to reach above the $1 barrier. The 61.8% Fibonacci extension level sat at $1.245 looked a likely area to target in the short-run. This was indeed seen, with the price actually heading up to $1.32 during trading yesterday.
The jump in Ripple (XRP) price was also correlated to the broader risk-on move seen in the crypto space. Others leading the pack included Ethereum, and more recently Dogecoin. This tied in with equity markets rallying late last week, along with UST yields remaining fairly stagnant.
Looking ahead, I’m not so sure this sentiment can be sustained. For a start, equity markets are in the red. The FTSE 100 is down 1.2% today, with the NASDAQ also down 1.25%. With the USD also bid across the board, it’s natural that crypto currencies would be pulling back.
The main driver for this move is the situation that is escalating in Afghanistan. Although it looks unlikely that US or UK troops will actively be engaging the Taliban at this stage, the images coming out of a rushed evacuation doesn’t bode well.
In such a way, I could see the Ripple (XRP) price moving lower over the course of the next week or so in response to this. From a technical perceptive, the evening star daily candlestick posted could also give a bearish setup.
A positive long-term outlook for the Ripple (XRP) price
Looking further out, the technical picture still looks appealing for the Ripple (XRP) price. Pulling out a descending trend line from the highs seen earlier this year should act as support around the $1.20 region. The double top from last week around $1.10 should also act as further support from any meaningful break lower.
With moving averages and Bollinger bands also playing catch up, I’d look to buy any short-term dips in the $1.10-$1.20 region. For the upside, there are a lot of long daily candles from volatile moves seen back in April/May in the $1.40-$1.60 region that could be the source of fresh resistance.
overall, I think negative risk sentiment in the short-run could see the Ripple (XRP) price move lower. I would be keen to buy the dip, targeting a move into the $1.40-$1.60 region.