Expect volatility, but this is still a “fade the rallies” type of situation.
Ripple has done almost nothing on Tuesday as we continue to see crypto markets do nothing as well. Ultimately, Ripple is in a major downtrend, and that is more likely than not going to continue to be the case. After all, there is a huge SEC lawsuit out there working against the company, and then we have to worry about the fact that the crypto markets themselves are melting down.
Remember, Ripple is being measured against the US dollar, which is by far the strongest currency out there, and it makes a lot of sense that we would see pressure on this coin. However, it is pretty far out on the risk spectrum, so it takes more risk appetite out there to get involved in this market than it does other coins such as Ethereum or Bitcoin. Speaking of which, both of those coins are struggling in general, so it is only a matter of time before the negativity over there will weigh upon this much smaller market.
On the upside, the $0.50 level is significant resistance, and it is likely that we would see downward pressure in that region. The market breaking above there would be the first step toward turning things around, but ultimately the $0.60 level is also resistance, and then above there we have the 50-day EMA that comes back into the picture as well. It is not until we get through all of that that I would consider buying Ripple, and at this point it looks like we are going to continue to see selling pressure.
The $0.40 level is a short-term support level, and then after that, we have the 35% level that will come into the picture as well. Ripple looks as if it is going to go down to the single-digit territory, but that does not necessarily have to happen right away. If we see Bitcoin break down below the $25,000 level, it will be like the trapdoor opening up on crypto in general, and obviously, Ripple will not have any chance in that type of scenario. After all, crypto has shown itself to be highly correlated to not only risk appetite, but everything that Bitcoin does. Expect volatility, but this is still a “fade the rallies” type of situation.