Ripple recently broke below the ascending channel support and is showing more signs of heading into a downtrend. Price completed its retest of the broken channel support around 0.1850, creating a complex head and shoulders pattern as well.
Price has yet to break below the neckline around 0.1800 to confirm that a downtrend is underway. The chart pattern is around 0.0200 tall so the resulting selloff could be of the same size, taking Ripple down to the 0.1600 level next.
However, the 100 SMA is still above the longer-term 200 SMA so the path of least resistance is to the upside, which means that there’s still some hope for the bulls. The gap is narrowing, though, so a downward crossover may be due and this could draw more selling pressure.
Stochastic is already indicating oversold conditions, so bears might also want to take a break. RSI has room to head south, on the other hand. Once both oscillators hit oversold levels and turn higher, buying pressure might return and allow the uptrend to resume.
Bitcoin has been outpacing most of its cryptocurrency peers in the past few days as the network upgrade has allowed it to handle much more transactions, increasing its demand and usage among institutions and investors compared to the likes of litecoin and Ripple.
The company behind Ripple is focused on building a better bitcoin as it wants to handle transaction volume on a higher scale. The company approaches banks with its enterprise software, along with the Interledger Protocol. They propose a corresponding banking paradigm in which banks with no direct relationship rely on intermediaries in order to send payments to each other.
But since bitcoin is already tackling this problem and without much issues from the hard fork, Ripple might be losing its edge. Its losses are limited for now, however, as the dollar is also on weak footing. Lower than expected PPI readings could dampen overall inflation and prevent the Fed from tightening next month and even in December while tensions with North Korea also limit gains for US assets.