Ripple blockchain’s native token XRP is up more than 25 percent so far into 2020. Nevertheless, the fourth-largest cryptocurrency is still looking to pare those gains, according to a string of bearish indicators brought forward by a TradingView.com analyst.
The US-based chartist pitted XRP/USD against three technically bearish setups. They included a long-term Moving Average wave, a Bearish Divergence between price and momentum, and a ‘death cross.’ Together, all three suggesting an extended dive towards $0.15, a classic support level situated 35 percent below the current rate.
Ripple chart shows XRP/USD in a large downtrend move. Source: TradingView.com
At first, the TradingView analyst highlighted a trail of lower highs and higher lows that XRP/USD has been leaving behind since 2018. The pair lately broke above the downward channel (in blue), but a strong upside rejection near the 200-week moving average curve threatened to push it back inside the range.
“You can see that price first fell below 200-WMA (in purple) in the summer of 2019,” the analyst explained. “XRP has consistently failed to rally back above the 200-WMA. It has been rejected there on the past three major attempts.”
He combined the XRP downtrend–especially the recent bearish wave–with its otherwise improving Relative Strength Index (RSI). The indicator reflects the strength or weakness of an asset, based on the closing prices of a recent trading period. The XRP’s weekly RSI grew higher–a sign of higher buying momentum–despite its spot rate trending lower.
“That’s a bearish divergence that could lead to weakness in the coming weeks,” the analyst said. “Although, there has already been a breakdown of the divergence on the RSI.”
XRP Death Cross
XRP was also trading downwards under the influence of a ‘Death Cross.’ It is a bearish indicator that comes into view after an asset’s long-term moving average closes above its short-term moving average. In the case of XRP, its weekly 200-WMA (purple) leaped over its 50-WMA (blue) back in January 2020, creating a so-called bearish crossover.
XRP/USD’s 200-WMA jumped above its 50-WMA. Source: TradingView.com
“It is a sign of prolonged weakness,” the analyst noted.
Apart from these three reasons, lower trading volume and volatility also left XRP’s latest upside move in a doubtful stage. The token attracted fewer traders over the last two years. That may have to do with an ongoing class-action lawsuit against its parent company, Ripple Labs, over whether or not XRP is security.
The San Francisco-based blockchain startup has reported its lowest quarterly sales in Q1 2020, selling just $1.75 million worth of XRP.
Source: Read Full Article