Ripple is bouncing off the support area highlighted in the previous article, indicating that buyers may be trying to regain control of price action. Zooming in to the short-term time frames reveals that price is forming a small reversal chart pattern and some bullish confirmation could be needed before the rally gains traction.
In particular, Ripple has formed a double bottom on its 15-minute chart after bears failed in their last two attempts to take it below the 0.2400 mark. The neckline is located at 0.3000 and a break above this could draw more buyers in. Also, price could climb by the same height as the double bottom chart pattern, taking it up to 0.3600.
However, the 100 SMA is below the longer-term 200 SMA on the 15-minute chart so the path of least resistance might still be to the downside. In addition, the 100 SMA is holding as dynamic resistance at the moment and might be enough to keep gains in check. A move past this level could encounter resistance at the 200 SMA next.
Stochastic is heading up but seems to be stalling close to the overbought zone. This signals bullish pressure exhaustion so profit-taking could happen next or sellers could get back in the game. Meanwhile, RSI is still on the move up to show that there’s some bullish pressure left, which might be enough to spur an upside breakout from the double bottom.
Once both oscillators hit overbought levels and turn lower, bearish pressure could pick up and lead to another move towards the bottoms or even a break lower. If that happens, Ripple would also be trading below the descending channel support visible on the 1-hour chart.
Dollar strength has recovered in the previous trading sessions as equity indices reached record highs again. Market concerns about the Trump administration appear to be fading as his trips abroad have taken the attention away from the ongoing investigation into the intelligence information leaks to Russia.
Apart from that, bitcoin is taking the lion’s share of the gains among digital currencies, including Ripple, as reports earlier in the week indicated that a consensus has been reached on how to approach the scaling issue.