Why traders should approach XRP price with caution
|- Ripple price could rally 18% today as bulls push price action higher.
- A break above the high of Thursday could see a test of $0.3710.
- XRP price is getting underpinned, but caution is needed as a potential dead-cat–bounce could be a trap to lure traders.
Ripple (XRP) price is trending sideways but with bulls gaining confidence by the fact that price action is underpinned around $0.30. Now with the dollar easing off a bit, a small window of opportunity is opening up for bulls to move price action higher. On the back of that, XRP is moving in the direction of the high of Thursday and, once broken to the upside, could rally another 7% to make it 19% in total just for this Friday. Going into the weekend, it will all depend on a clear signal where a daily close above $0.3710 would be necessary to then consider $0.4228. Alternatively, in the opposite scenario, it might be time to cash in as a drop back to $0.30 unfolds.
XRP price could burn people that do not respect the technicals
Ripple price is entering a bit of calm water this week with price action underpinned around $0.30 as the historic pivotal level held quite beautifully, allowing just a few short excursions by bears below, that resulted in them being squeeze out in a few bear traps. As markets are reeling from the inflation headwinds, the dollar is easing off on headlines from the ECB that weakened the Greenback. With a small window of opportunity opening up, it looks like bulls are not refraining from jumping in and could even trigger a positive weekly close.
XRP price would need to first break above $0.35 for such a positive close in a move that would also break the double top from Thursday and Wednesday. To get there roughly 7% needs to be crossed. If equity futures can hold onto their gains and rally further into the close this evening, expect to see that same lift in XRP price and a tick of $0.3710, where the close will be critical to set the tone for the weekend. If the rally is cut short, on the other hand, expect the decline to continue to stretch.
XRP/USD daily chart
As already spelled out in the introductory statement, the trade needs to be approached with caution as cryptocurrencies are trading under a thinner liquidity regime where any price jumps could quickly occur when a gap in the price action occurs. That could come with a firm rejection against $0.3710 and see another push down towards $0.3043, and even a break again next week. At risk would be a 42% gap lower towards $0.1737 if markets focus back on headwinds.
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