XRP not immune to the FED, settlement unlikely to be bullish
For the past few days, we did not give many thoughts to XRP as it continued to be choppy between 0.38$ and 0.42$. As a result, we abandoned our price targets in the previous article and introduced a setup for their re-activation. Since then, we have waited patiently for more signs of weakness to confirm our previous assessment about the unsustainable rally.
In November 2022, volume continued to decline, indicating less trading activity at elevated prices. In addition to that, the total cryptocurrency market cap marked a new yearly low; and as if it was not enough, the overall situation in regard to fundamental factors did not change at all. The FED will continue its path of tighter monetary conditions, which will extort more pressure on the cryptocurrency market and drag prices lower.
Furthermore, a potential settlement between the SEC and Ripple Labs, Inc. is about four months away. During that time, the FED is expected to raise interest rates at least once. As a result, we do not expect XRP to be any exception and become immune to tighter economic conditions. With that being said, we are also very skeptical about the general narrative considering the settlement as highly bullish for XRP.
At the beginning of this bear market rally, we stated that this whole price action is very reminiscent of “buy the rumor, sell the fact” behavior. Today, we continue to hold this opinion and expect XRP to retest its recent lows over time.
Illustration 1.01
Illustration 1.01 shows the updated setup we introduced on 25th November 2022. Back then, we said that our price targets would become active once the price retraces back below the immediate support/resistance.
Technical analysis
Daily time frame = Slightly bearish
Weekly time frame = Neutral
Illustration 1.02
Illustration 1.02 displays the daily chart of XRPUSD and simple support/resistance levels.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
In November 2022, volume continued to decline, indicating less trading activity at elevated prices. In addition to that, the total cryptocurrency market cap marked a new yearly low; and as if it was not enough, the overall situation in regard to fundamental factors did not change at all. The FED will continue its path of tighter monetary conditions, which will extort more pressure on the cryptocurrency market and drag prices lower.
Furthermore, a potential settlement between the SEC and Ripple Labs, Inc. is about four months away. During that time, the FED is expected to raise interest rates at least once. As a result, we do not expect XRP to be any exception and become immune to tighter economic conditions. With that being said, we are also very skeptical about the general narrative considering the settlement as highly bullish for XRP.
At the beginning of this bear market rally, we stated that this whole price action is very reminiscent of “buy the rumor, sell the fact” behavior. Today, we continue to hold this opinion and expect XRP to retest its recent lows over time.
Illustration 1.01
Technical analysis
Daily time frame = Slightly bearish
Weekly time frame = Neutral
Illustration 1.02
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
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