XRP Price Risks 30% Drop Despite Ripple’s Legal Earnings Outlook

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The XRP price fluctuated between gains and losses on September 19, despite hopes that Ripple would eventually win its long-running legal battle against the US Securities and Exchange Commission (SEC).

Fed spoils SEC vs. Ripple Euphoria

The XRP/USD pair fell more than 1% to USD 0.35 as it formed extremely sharp bullish and bearish wicks on its September 19 daily candlestick. In other words, the intraday performance pointed to a growing bias conflict among traders.

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XRP/USD daily price chart. Source: TradingView

The indecision may be due to XRP’s exposure to catalysts other than the SEC vs. Ripple lawsuit. Namely, the potential of the Federal Reserve to raise its benchmark interest rates by another 75 or 100 basis points during their policy meeting on September 20.

As TBEN reported, fears of aggressive rate hikes have strained the crypto market throughout the year, including Bitcoin (BTC) and Ether (ETH). XRP is also not immune, given the token’s consistently positive correlation with Bitcoin since October 2021.

XRP/USD and BTC/USD daily correlation coefficient. Source: TradingView

For example, the daily correlation coefficient of XRP with Bitcoin on September 19 was 0.47. A reading of 1 means the two assets are moving in lockstep.

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XRP price threatens to go below $0.25 in Q4

Independent market analyst Cheds emphasized that XRP has fluctuated within a rectangular range since June, adding that there is currently “nothing to get excited about.”

The range is defined by $0.38-$0.40 as resistance and $0.28-$0.30 as support. The price of XRP fell after resistance testing and was moving into support territory on September 19 as shown below.

XRP/USD daily price chart with head and shoulders setup. Source: TradingView

Interestingly, a move towards the rectangular range support could also trigger a classic bearish reversal pattern called the head-and-shoulders, defined by three consecutive peaks that form atop a common support level, with the middle peak (head) higher than the other two (left and right shoulder).

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A head-and-shoulders pattern resolves after the price moves below the support line and falls by as much as the maximum distance between the mid-peak and the support. Applying this theory to XRP’s daily chart yields $0.242 as a downward target.

In other words, XRP price could lose another 30% by the end of this year, mainly driven by macro catalysts.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of TBEN.com. Every investment and trading move carries risks, you should do your own research when making a decision.