Ripple has been trending below a descending trend line and looks prime for another correction. Applying the Fibonacci retracement tool shows that the 61.8% level lines up with the falling resistance and could be the line in the sand for a pullback.
This also lines up with the 200 SMA dynamic inflection point, which adds to its strength as a ceiling around the 0.6500 level. The 100 SMA is closer to the 50% Fib and is below the 200 SMA to signal that the path of least resistance is to the downside. In other words, the downtrend is more likely to resume than to reverse.
RSI is pointing up to show that buyers still have some energy left for more gains, so a higher correction is possible. Stochastic is also heading higher but dipping into overbought territory to signal that buyers could be exhausted soon and ready to let sellers take over. If so, another move to the swing low could be seen.
Much like its other cryptocurrency buddies, Ripple hasn’t seen a lot of developments recently and has been vulnerable to overall market sentiment. It has also been sensitive to dollar action, enjoying a bit of a bounce after this week’s release of the FOMC meeting minutes for May.
However, there are rumors that Amazon will adopt Ripple due to the swift and cheap nature of its transactions. In addition, the relatively large supply of Ripple means lower volatility for this particular altcoin compared to its peers like bitcoin.
Lastly, the lower price compared to other cryptocurrencies has also made it more friendly to mainstream users versus bitcoin whose price can be daunting for most.
But without any confirmation or any other developments, Ripple could maintain its steady drop, especially since geopolitical tensions are keeping risk appetite in check these days.