XRP 4-hour chart
XRP moved south from the upper trendline of its symmetrical triangle but the pattern was intact thanks to the 4-hour 20 (red) and 50 (yellow) Simple Moving Average line, which acted as support marks. However, failing to hold on to these barriers would leave XRP exposed to a minor sell-off over the coming sessions.
A key level to maintain was at $0.662- an area that clashed with the hourly 200-SMA (not shown) and also saw interplay with the 50-SMA as shown on the chart. A close below $0.662 would drag XRP to its 2nd July swing low of $0.633, whereas a sharper retracement would call $0.584 support into action. Visible Range highlighted some interest for XRP at the aforementioned supports and buyers would likely counter an extended sell-off at these levels.
Reasoning
MACD was on the cusp of a bearish crossover and its histogram noted receding bullish momentum as prices inched closer to the lower trendline of their pattern. Relative Strength Index pointed south from neutral territory and a move below 45-40 would indicate bearish strength. Directional Movement Index was yet to switch its bullish stance but the index did converge at press time. A bearish crossover between the -DI and +DI lines would indicate a trend shift in the market.
While signs of a clear downtrend were yet to materialize, traders could set up short trades in anticipation of a stronger wave of selling pressure. A safe entry point would be to wait for XRP to break below its SMA’s before initiating a trade.
Levels to watch out for:
Entry: $0.660
Take-profit: $0.6337
Stop-loss: $0.70
Risk/Reward: 0.68x
Conclusion
XRP’s potential breakdown from a symmetrical triangle presented opportunities for shorting in the market. Take-profit was set up at its support level of $0.6337- an area that showed a good level of interest for XRP as per the Visible Range. Stop-loss was at its 4 July swing high of $0.70.
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