Ripple (XRP) price analysis: traders buy the rumour, sell the news on RippleNet

xrp

The old stock market adage ‘buy the rumour, sell the news’ has played out in spades for XRP.

The Ripple Lab’s XRP crypto asset has dropped 14% in the past two days from its recent intra-day high at $0.62.

This morning sees XRP send the market lower, although is only down 1.6% as it continues to trade in a narrow range.

No-one can say investors haven’t been buying the rumour over the past couple of weeks, with the crypto asset tripling in value at one point.

Indeed, there has been not rumour but rather a solid news flow in the run up to the annual Swell event.

News of partnership with global bank Santander – not using RippleNet (and therefore XRP) for liquidity in its consumer-facing cross-border payments app – didn’t nudge the price higher.

The three companies that are deploying RippleNet XRP are significant but smaller fry: MercuryFX and Cuallix as well as cooperative financial firm Catalyst Corporate Credit Union.

Technical analysis


So that big news, and that of two other banks also deploying RippleNet, was not enough to set the price on a path to challenge $0.60 let alone $0.70.

XRP is holding support established on 22 September at $0.50949.

That might seem a precarious position after such a strong rally but pulling out to the 1-day chart (see below) and bulls can be reassured that much of the gains are in tact despite the possibility of retracement to the next support $0.265, which would be back to where we started on 18 September when the mega rally began.

xrp price chart

XRP 1-day chart, 3 October 2018. Descending wedge buy signal paid off handsomely (courtesy TradeView)

We don’t even need to draw the trendlines today because the price action has been pronounced  – with bulls the big winners with sellers unable to puncture support between $0.50 and $0.543.

Bulls like a descending wedge as seen on the 1-day chart directly above and in the live chart leading into the plateau, and it is the narrowing of that wedge which built up the buying demand at the “B” apex.

The perpendicular leap on 21 September explains the subsequent loss of momentum, alongside investors taking profits during the Swell event.

The take away from the past few days brings Ripple followers back to the old conundrum – does price appreciation actually work for banks trying to use XRP for liquidity?

Banks might prefer that XRP stays in its current support band (see below, dashed red lines) of $0.50 – $0.543, or if continues to appreciate, to do so in a smoother less volatile curve.

XRP 1-hour chart, 3 October 2018

If XRP doesn’t hold current levels then the pullback will likely gather pace with downside limited by the adoption story.

However, as adoption continues, Ripple the company will surely be a financial beneficiary. Bulls, as ever, will be hoping that less sophisticated retail investors  – those who haven’t already crystallised their losses – will get sucked into the Ripple Labs feel-good slipstream and bid up the price of XRP further.

If it’s any consolation for impatient bulls, Ripple co-founder Jed McCaleb’s rival Stellar (XLM) platform is off 4.5% at $0.24.

What Bill Clinton said…

And in case you missed the big speech, here’s a rehash of some of Bill Clinton’s keynote at Swell (which by all accounts was a bit of a “ramble”):

“The permutations and possibilities are staggeringly great. But we could ruin it all by negative identity politics and economic and social policy.”

“You can’t apply [an] old regulatory regime to a new technology

“You end up killing the goose that laid the golden egg,

“The permutations and possibilities are staggeringly great. But we could ruin it all by negative identity politics and economic and social policy.”

Overall crypto market cap has fallen this morning at $216 billion. Bitcoin is slightly lower at $6,490 with most alts outpacing BTC’s decline.

XRP at pixel time is priced at $0.533, down 4% over 24 hours, according to coinmarketcap.

About the Author

Gary McFarlane
Gary has been writing about cryptocurrencies since 2013 and currently works as the cryptocurrency analyst at interactive investor, the UK's second-largest online investment platform. Gary contributes for Coin Intelligence News in a personal capacity and none of his commentary should be considered investment advice. Gary is the winner of the ADVFN International Financial Awards 2018 Cryptocurrency Writer of the Year. Contact Gary on twitter at: @gary_mcfarlane

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