Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
The Bitcoin market was rallying once again and had been trading at an all-time high of over $29k at the time of writing. This surge has injected life into many of the market’s altcoins. XRP was recently stripped from its third position on the CoinMarketCap list as its market cap slipped to $10.66 billion.
At the time of writing, the price of the digital asset has been close to $0.2344 between a rigid range.
XRP one-hour chart
Source: XRPUSD on TradingView
According to the chart above, XRP has been consolidating between $0.2250 and $0.2424 price level. This price range has been close to the price level observed during most of 2019 and early 2020. As the delisting of XRP continued from exchanges, the impact has been visible on the price. However, as the selling pressure continues, traders can use this opportunity to short the token.
Reasoning
Since the price has been consolidating in the given range, the lower trending price might once again move to test the support at $0.2250. The sell-off may result in increased pressure in the market and may push the price lower. The volatility has been slowly increasing in the market, as highlighted by the diverging Bollinger Bands.
Whereas, the Relative Strength Index which has pushed the asset into the overbought zone twice after the drastic sell-off was at the equilibrium zone, but was pointing lower. This meant that the selling pressure might increase at the current price level. Despite the rise, the coin has levels of support to test and it may not be a violent sell-off unless triggered by another major event.
Position
Entry: $0.2320
Stop-Loss: $0.2382
Take-Profit: $0.2181
Risk-to-Reward: 2.23
Conclusion
XRP’s traders can prepare for the price to drop to $0.2181. The evolving pressure in the market may put support at $0.2250 to test and might settle above $0.2059.