Source: PaxForex Premium Analytics Portal, Fundamental Insight
Ripple continues its battle with the SEC in what appears to be a never-ending saga, but two tweets by David Schwartz, the co-creator and CTO of Ripple, cast a shadow on the future of Ripple. He tweeted that “When a scrappy financial startup takes on a web of corruption and betrayal to bring instant payments to the masses, they learn that the cost of disrupting the status quo is higher than they could ever have imagined, forcing them to decide between their vision and their survival.” Another tweet suggested that Ripple may “may be tempted to walk through a door and shut it,” leaving the community wondering who will walk through the door with Ripple, and who will be left behind.
Stuart Alderoty, chief legal officer at Ripple, suggested that if the current judge sides with the SEC, Ripple will take its case to the Supreme Court, where the SEC has lost four of their last five cases. While it appears that Ripple maintains the upper hand, the lengthy process could force management to cave in and give up, which would allow the SEC to accomplish its goal. It would mean the end of Ripple and the XRP/USD, dropping its value to zero overnight.
Until more clarity becomes available, and despite the upside potential in Ripple, traders should approach the XRP/USD with caution, as downside risks have increased in 2023. It will not change until the Ripple management sends a clear signal that it will fight on. Additional downside pressure comes from the ongoing interest rate increases by the US Federal Reserve to fight stubbornly high inflation. The XRP/USD is trapped in a bearish price channel, and until a clear bullish catalyst emerges, the medium-term outlook remains bearish.
The forecast for the XRP/USD turned cautiously bearish after this cryptocurrency pair moved below the 0.4000 support level. After the Ichimoku Kinko Hyo Cloud flatlined, the Kijun-sen and the Tenkan-sen followed suit, suggesting the lack of short-term upside momentum. It makes price action vulnerable to an extension of the current correction. Traders should also monitor the CCI after it completed a breakout from extreme oversold territory but was unable to maintain upside momentum, which resulted in a renewed move below zero. Can bears maintain selling pressure on the XRP/USD, aided by fundamental uncertainty, and force price action into its horizontal support area, challenging 2023 lows? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the XRP/USD remain inside the or breakdown below the 0.3750 to 0.3920 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: short Position
- Entry Level: Short Position @ 0.3835
- Take Profit Zone: 0.3230 – 0.3400
- Stop Loss Level: 0.4150
Should price action for the XRP/USD breakout above 0.3920, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.4150
- Take Profit Zone: 0.4600 – 0.4715
- Stop Loss Level: 0.3920
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio.
