Ripple made a strong bounce back to the top of its descending channel visible on the 1-hour chart and might have some bullish momentum for a breakout. But if sellers return at the .4600 mark, another dip to the bottom may be in the works.
The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. The gap between the moving averages is also widening to reflect stronger selling pressure and the 200 SMA appears to be holding as dynamic resistance near the channel top.
In that case, Ripple could find its way back to the lows near .4350 or the channel bottom at .4300. Some support might also be found at the .4400 mid-channel area of interest.
Stochastic is on the move up to indicate that there’s still some bullish pressure left and might be enough to sustain a break higher. After all, a tiny bullish flag can be seen after the sharp rally and this is often considered a continuation signal. RSI also has room to climb before indicating overbought conditions or exhaustion among buyers.
Month-end flows may have triggered the bounce for Ripple as risk appetite also made its way back to general financial markets. Either that or traders are more optimistic about the new month, which could bring fresh developments for the industry.
Besides, CEO Garlinghouse also shared more insights on the company’s plans. He highlighted the use of Ripple in financial settlements as it addresses a lot of liquidity issues. He did admit that introducing Ripple to banks and financial institutions takes time but that it solves friction involving payments and their xCurrent platform is one way to onboard these firms.