Bitcoin continues its parabolic course, breaking through the $ 40,000 level to record a high of $ 41,986. Ethereum was also trading above $ 1200. The altcoin market has seen many coins, large cap and not, register good gains.
XRP had a rather blurry picture. Further bearish news or a correction in the market could easily see XRP lose the important $ 0.3 level in favor of the bears.
1 Day XRP Chart
Source: XRP / USD on TradingView
We know how XRP’s surge to $ 0.78 turned out. What is important to consider is the fact that before the breakout. XRP has been trading in a range of $ 0.17 to $ 0.3 since July 2019.
In the long run, $ 0.3 is indeed a very important level. This is why the move above this level over the past few days has given XRP bulls hope.
Even though XRP has a low correlation of +0.3 to BTC. It remains a fact that XRP has not seen an expected appreciation. Bitcoin and Ether have multiplied in value over the past few months. A deep correction in the crypto market will also see XRP face intense selling pressure.
Therefore, for XRP, a short position should prove to be the profitable bet provided that $ 0.3 is traded to the bears.
Reasoning
The RSI shows that the bearish momentum that gripped XRP has given way to a more neutral outlook. Defense of the $ 0.3 level is vitally important over the next few weeks.
A daily close below this level is very likely to see XRP register further losses, with the midpoint of the range at $ 0.23 likely to be tested in this case.
The RSI has yet to break above the neutral value of 50. It could be about to test this value before moving back down beside the price. The 100-day moving average (pink) should also offer resistance to XRP.
Position
Note that this trade requires $ 0.3 to be lost and retested as resistance to enter a short position.
Admission: $ 0.3
Stop-loss: $ 0.345
Profit: $ 0.23
Risk-reward: 1.56
Conclusion
In the scenario where XRP loses the $ 0.3 level to sell pressure, a short position is recommended. A consolidation above this level over the next few days does not necessarily mean that XRP is on the road to recovery. But a move above $ 0.36 would indicate bullish strength for XRP.
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