Bitcoin has been witnessing a wave-like movement, and other altcoins have been mirroring it. XRP, after a long period of consolidation, surged to an annual peak at 0.8290; however, the asset’s value has since been declining. At press time, the value of XRP reached $0.5525 and has been consolidating at this level.
With the trend taking shape in the market, a short position could serve long-term traders well.
XRP one-day chart
Source: XRP/USD on TradingView
According to the chart, the value of XRP has been decreasing. This decrease in value was traced by a descending triangle pattern, which connected lower highs of XRP. It also marked the base for the triangle at 0.5406.
This pattern carries a bearish implication, indicating a further dip in the value of XRP. With no strong support in sight, the fall could lead the digital asset to 0.44.
Reasoning
Relative Strength Index also noted that when XRP marked its annual peak, the asset had reached the overbought zone. The falling value of XRP was an effort to stabilize its price near equilibrium. However, the coin still remained close to being overbought. A fall thus feels imminent.
MACD indicator has also been showing signs of the emergence of bearish pressure. MACD line slid under the signal line, which suggested that selling pressure has been triggered in the XRP market and the bars under 0, noted that this pressure was only increasing.
Position
Entry: $0.5460
Stop-Loss: $5907
Take-Profit: $0.4443
Risk-to-Reward: 2.27
Conclusion
XRP market is primed for a sell-off and this could be an opportune time for the traders to set a short position. The increasing selling pressure could cause XRP to breach base and support at $0.54 and drop further.