Ripple (XRP-USD) continues to trade within the range identified in the long-term chart, as a lack of positive momentum continues to limit attempts by this crypto to join its contemporaries in pushing to the upside in a sustained manner. What lies ahead for XRP/USD as the month of May 2019 gets underway?
The Q1 report released by TNW chronicles the struggles experienced by Ripple so far in 2019. The report provided a detailed comparison between the performance of Ripple in 2019 and its performances in 2017 and 2018. Ripple has underperformed in 2019 so far, as it was not part of the cryptos that experienced a brief resurgence in the first quarter.
However, things may be looking up for the coin as it continues to attract new partnerships, the biggest of 2019 being its listing on Coinbase.
Ripple investors are awaiting news on banks utilizing its cross-border payment systems in a way that fully shows the disruptive ability of the tech and the way that XRP can be integrated for value. That hasn’t happened in 2019 despite a lengthy and impressive list of partners.
The technical play for XRP/USD starts on the weekly chart, where the price action continues to trade within the confines of a range that has $0.28408 as the price floor and $0.40198 as the price ceiling. This range has remained intact since January 2019, with volumes continuing to remain relatively low. This is a situation that favours range trading, and as long as there is a lack of positive momentum on these assets, we may continue to see prices range trading in the long term.
XRP/USD Weekly Chart: May 5, 2019
We step down to the daily chart to catch a glimpse of the mid-term focus for XRP/USD. Here, we see that in the midst of the long-term range, price moves are being contained within the borders formed by two converging trendlines: this is a symmetrical triangle.
XRP/USD Daily Chart: May 5, 2019
Of interest to the analyst is the volume patterns observed as price is evolving within the pattern. Despite the fact that volumes are relatively low, we also see that the green volumes bars (buying volume) are longer than the red volume bars (selling volume). This is significant to the eventual resolution of this pattern, as price breakout in a neutral pattern such as the symmetrical triangle will usually occur in the direction that has the predominant buying volume during pattern evolution.
We also note the presence of two horizontal price levels. First is the 0.34000 level, which is an area where price has at various times found minor resistance. We also have the 0.28408 level, which is a support line that acts as the floor for the present price range on the weekly chart.
What do we expect will become of the price action as the rest of May 2019 rolls by?
Trade Scenario 1
The key support area of 0.28408 continues to remain intact, as does the resistance level marked as R1, which also functions as the price ceiling for the range. The market price is presently positioned in the middle of this range. Attainment of the price floor or price ceiling will depend on price breaking one of the borders of the symmetrical triangle shown on the daily chart.
An upside break of the symmetrical triangle will see price pushing towards the price ceiling once more. This move needs to be accompanied by an increase in buying volumes. Following this move, price is expected to test the 0.34000 level as it makes a push to the price ceiling of 0.40198. Further moves will depend on whether the buying volume is enough to push prices to close above this level. These moves may take several weeks to evolve.
Trade Scenario 2
A downside break of the descending triangle on the daily chart will see prices make a push for the 0.28408 price level. Whether prices continue below this level will depend on the situation in the crypto market at the time. An increase in selling volumes will definitely help this cause, even though it is not a compulsory requirement.
The long-term and mid-term of the XRP/USD pair is as follows:
- Long Term – neutral
- Mid-term – neutral to bullish
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Disclosure:I am/we are long XRP-USD.I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Disclaimer: Please note: most of this analysis was done on the weekly and daily chart. With prices still ranging on the long-term chart, the price moves described above may take several weeks to fully evolve. Traders should, therefore, be patient and use good risk management.