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Crypto Frontline

Should We Adopt a Contrarian View on XRP?

Should We Adopt a Contrarian View on XRP?

Should We Adopt a Contrarian View on XRP?
September 12
07:01 2019

 

Although a promising token back in 2017, XRP is currently in the negative as compared to the January 2019 open and looks poised to retest the December 2017 lows, located around 20.5 cents on the Kraken exchange.

This year we’ve seen several important news regarding XRP, including the integration into the WooCommerce platform. Following short-term bullish moves, sellers had resumed each time and continue to push the price lower. Despite the negative performance we’ve seen thus far, we would like to dig into a few subtle details that might suggest the long-term is brighter for XRP. We should emphasize that this is just our opinion on XRP, and does not guarantee it will certainly happen.

Do weakening angles suggest diminishing selling?

If we zoom out on the daily chart, in order to include the performance back to the last quarter of 2017, we could see the bubble-and-burst structure, but an interesting detail could be raising hopes for the long-term horizon.

XRP chart September 2019

Source: tradingview.com

By analyzing the last three major selling moves, we can notice, that each one gets longer and covers less and less ground. We are below the daily 200 moving average, but what might be positive for the buyers is that volatility continues to compress, as we get closer to the December 2017 lows.

Key support area to watch

We’ve highlighted XRP in a few weekly crypto analyses in the past two months and mentioned a price floor which at the present time is broken. Still, as we continue to move lower, buyers should monitor carefully the 22.81 cents – 20.5 cents area, given that there we could witness the beginning of a new strong bullish move.

At the present time, XRP is still the third-largest cryptocurrency in the world, with $10.9 billion in market cap according to the industry website coinmarketcap.com. We should consider that XRP is not a decentralized cryptocurrency like Bitcoin or Ether, and could be a huge beneficiary if the regulatory scrutiny on crypto assets will intensify.

So far, the token had been an underperformer in 2019 and its dominance had dropped to 4.22% at the time of writing. As the price nears the above-mentioned support area, we should start to see XRP starting to bounce. From our point of view, the balance of probabilities for a bullish leg to form around that zone is currently at 55%-60%, and will increase further if the price reacts positively when it reaches the support. With most of the other large-cap tokens already banking strong gains in 2019, XRP could be a surprising contrarian investment waiting in the shadow.

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