Ripple blockchain’s native token XRP is up more than 25 percent in 2020 so far. Nevertheless, the fourth largest cryptocurrency is still looking to fix those gains, according to a series of bearish indicators put forward by an analyst. from TradingView.com.
The US-based chartist pitted XRP / USD against three tech bearish setups. They include a long term moving average, a bearish divergence between price and momentum and a death cross. Together, all three suggest an extended plunge to $ 0.15, a classic support level 35 percent below the current rate.
Ripple chart shows XRP/USD in a large downtrend move. Source: TradingView.com
Price momentum conflict
Initially, the TradingView analyst pointed to a trail of lower highs and higher lows that XRP / USD has outperformed since 2018. The pair recently broke above the down channel (in blue), but a strong upward rejection near the 200-week moving average curve threatened to push it back within range.
“You can see that price fell below the 200-WMA (in purple) for the first time in the summer of 2019,” the analyst explained. “XRP has consistently failed to rise above 200 WMA again. It has been rejected there in the past three major attempts. “
He combined XRP’s downtrend – especially the recent bearish wave – with his further improving Relative Strength Index (RSI). The indicator shows the strength or weakness of an asset, based on the closing prices of a recent trading period. The XRP’s weekly RSI grew higher – a sign of higher buying momentum – despite the lower spot price.
XRP Death Cross
XRP also traded down under the influence of a ‘Death Cross’. It is a bearish indicator that comes into view after an asset’s long-term moving average moves above its short-term moving average. In the case of XRP, its weekly 200-WMA (purple) jumped over its 50-WMA (blue) in January 2020, creating what is called a bearish crossover.
XRP/USD's 200-WMA jumped above its 50-WMA. Source: TradingView.com
“It’s a sign of long-term weakness,” the analyst noted.
These three reasons aside, the lower trading volume and volatility also left XRP’s latest upward move in questionable phase. The token has attracted fewer traders in the past two years. That may have to do with an ongoing class action lawsuit against its parent company, Ripple Labs, over whether or not XRP is security.
The San Francisco-based blockchain startup has reported its lowest quarterly revenue in Q1 2020, with XRP sales of just $ 1.75 million.