Source: PaxForex Premium Analytics Portal, Fundamental Insight
Ripple continues to struggle as its legal battle with the US SEC continues. On December 22nd 2020, the SEC filed a lawsuit against Ripple and concluded that XRP is an unregistered security under federal law. It plunged the XRP/USD from its 2020 peak of just shy of 0.7800 to below 0.200 before regaining its footing. Following the lawsuit, many cryptocurrency exchanges delisted XRP to remain compliant and keep their operating license. Ripple also lost sponsorship contracts, and US holders of XRP have challenges to convert it into US Dollars. Since the SEC labeled XRP as an unregistered security, many US investors are unsure if they violate laws, how to get out of it, and what the penalties could be.
The latest wave of selling may unfold as Grayscale announced the dissolution of its XRP Trust. The short-term outlook remains bearish, but patient long-term investors with a dose of risk appetite may want to consider loading up on the XRP/USD during a firesale. GateHub and Uphold announced their ongoing support for XRP unless the SEC forces it to delist the token. Most headlines are bearish, but smart investors will recognize the bullish signs and take advantage of lower prices in the short-term.
The forecast for the XRP/USD turned bullish after price action moved above its ascending Tenkan-sen. An increase in volatility is expected as bulls and bears fight for the next move in price action. It Kijun-sen entered a sideways trend, suggesting selling pressure is easing. The CCI continues to advance and has more upside potential. The XRP/USD faces an uphill battle but can spike into its descending Ichimoku Kinko Hyo Cloud, where its next horizontal resistance area awaits together with the 0.5000 psychosocial resistance level. Will bulls deliver more upside in the XRP/USD? 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 breakout above the 0.2810 to 0.3150 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.2975
- Take Profit Zone: 0.4300 – 0.5025
- Stop Loss Level: 0.2500
Should price action for the XRP/USD breakdown below 0.2810 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.2500
- Take Profit Zone: 0.1700 – 0.2100
- Stop Loss Level: 0.2810
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