Published
5 years ago on
December 24, 2018
Ripple (XRP) has reached overbought levels and the price is due for a heavy retracement short term. The daily chart for XRP/USD already shows that the price has been rejected strongly at the 38.2% Fib Retracement Level. This means that the price has to drop now to the 23.6% Fib retracement level which will act as a weak support. The price can very well fall below that and find a support at the 5 Day EMA or lower levels. So far, the chances of a breakout from current levels appear very weak. The probability of all towards lower levels is far greater than the probability of a breakout towards the 61.8% Fib retracement level.
This is the first time in a long time that the price has finally attempted to break past the 200 Day MA. The last time Ripple (XRP) attempted to break past the 200 Day MA was back in November. It happened in October as well. All of these times, Ripple (XRP) failed miserably to make any breakthrough and the price had to retrace heavily after that. This time, same as before the attempt to break past the 200 Day MA seems to have failed. If the conditions were different and XRP/USD had not already topped out, we might have expected the attempt to have been successful. As the RSI for the daily chart shows, Ripple (XRP) is now in overbought territory and is due for a strong retracement in the days ahead. This retracement has a small chance of dragging the price back towards its yearly low. 
Chart for XRP/BTC (1D)
The most probable scenario for XRP/USD is a short term retracement that will pull the price back towards the 10 Day EMA to complete the shoulder of the IH&S pattern. If this level fails to hold, then we can expect Ripple (XRP) to fall towards the 21 Day EMA. However, there is little to no chance that the price will end up breaking below the 21 Day EMA because it will push Ripple (XRP) into another correction which we do not see happening at this point. For a long time now, Ripple (XRP) has been due for a correction to the upside and it is going to get it. The price is only going to retrace short term so that it can garner the strength to stage a successful rally that may push the price towards $1 in early 2019.
Ripple (XRP) is perhaps the only cryptocurrency in the market that rallies as if it does not care about the predicament facing Bitcoin (BTC). It is not unusual for Ripple (XRP) to register double digit gains when Bitcoin (BTC) rises by a few percent. The recent rally resulted in Ripple (XRP) rising more than 20% just in the last 24 hours. This is the sort of trading behavior that puts Ripple (XRP) ahead of most other coins. Even if the price of Ripple (XRP) retraces short term in dollar value, it is still significantly ahead of most cryptocurrencies at the beginning of a new rally.
