Source: PaxForex Premium Analytics Portal, Fundamental Insight
Financial markets will attempt to recover from heavy selling, with the Dow Jones closing down for eight consecutive weeks, which last happened before the Great Depression almost 90 years ago. The NASDAQ Composite mirrors behavior during the dot-com crash, and cryptocurrencies navigate through their first period of high inflation and a rising interest rate environment. Any rally in financial markets is likely a bull trap, but Ripple presents an unusual long-term value case for patient investors.
The SEC lawsuit presents the biggest factor. The financial world awaits a court ruling that could force the SEC to make documents available, where former SEC Director William Hinman outlined that cryptocurrencies are not securities. While he mentioned Bitcoin and Ethereum in his 2018 speech, defense attorneys for Ripple seek the release of internal documents of Hinman's communications and consultations concerning cryptocurrencies. They will likely prove that Ripple did not violate securities laws and give buyers waiting on the sidelines a signal to rush into the XRP/USD.
Despite the ongoing SEC lawsuit, Ripple continues to onboard clients. It has an ever-expanding base for its On-Demand Liquidity (ODL) service, with the latest addition the Lithuanian company FINCI, an international money transfer provider, which will use the ODL service for transactions between Europe and Mexico. Plenty of short-to-medium-term concerns remain, but the long-term outlook for Ripple is bullish. Ripple also announced a $100 million commitment to the carbon market to accelerate carbon removal activities, achieve its internal carbon-neutral level by 2030, and tokenize carbon credits to scale the ever-growing carbon market. It opens it up to ESG investors and could provide an additional avenue of capital inflows as Ripple seeks to increase transparency and accountability of the corporate sector in fighting climate change.
The forecast for the XRP/USD turned moderately bullish after this cryptocurrency formed a reversed flag formation, suggesting a reversal may follow. Adding to an improving outlook are the Kijun-sen and the Tenkan-sen, which slowed their rate of descent and showed a period of sideways actions, confirming a struggle between bulls and bears for control over price action. The Ichimoku Kinko Hyo Cloud maintains its downward trajectory and provides a shifting resistance level. Traders should monitor the CCI following its breakout from extreme oversold territory. A push above zero can add upside pressure and provide a final buy signal. Can bulls overcome bears and push the XRP/USD into its horizontal resistance level? 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 0.3840 to 0.4615 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.4180
- Take Profit Zone: 0.6735 – 0.7310
- Stop Loss Level: 0.3300
Should price action for the XRP/USD breakdown below 0.3840, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.3300
- Take Profit Zone: 0.2380 – 0.2970
- Stop Loss Level: 0.3840
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio.
