XRP Price Prints Bullish Divergence, Could Imply Impending Rally

XRP Price Prints Bullish Divergence, Could Imply Impending Rally 8

XRP hasn’t done too well in 2019. As pointed out by analyst Crypto Thies, the third-largest cryptocurrency is the only one in the top ten digital assets by market capitalization to have fallen against the U.S. dollar in 2019.

Indeed, XRP is currently trading for $0.29, down from where it started in January, $0.34. While a 15% loss isn’t exactly the end of the world per se, the cryptocurrency has largely underperformed the market leader Bitcoin, which is up to $9,200 from its start-of-year price of $3,700.

Why? You might be asking.

Well, traders purport that this underperformance has much to do with the sale of XRP by Ripple. In its financial report for the third quarter, the company revealed that it sold $66.24 million worth of XRP, with the vast majority being sold to institutions:

“Ripple sold $66.24 million XRP in Q3 2019, a 73.7% decrease in sales in the cryptocurrency QoQ, as measured in USD. Overall market capitalization of digital assets decreased in Q3, with the overall market cap losing 30.4%. Price declined 35.4% QoQ.”

The effect of these sales hasn’t been fully quantified, but it is the only visible, consistent factor that has the potential to depress the price of the altcoin over time.

Can XRP Recover?

Sure, XRP’s performance, when put in the context of the cryptocurrency market’s overall performance, is extremely harrowing, but can the cryptocurrency make a comeback?

Technical signals say it can.

Thies noted that there is a “decently large bull divergence on the one-week chart for XRPUSD,” marked by strength in a technical indicator as prices have fallen. The divergence implies that the cryptocurrency may shoot higher in the coming months.

Also, prominent commodities trader Peter Brandt noted that the altcoin has formed a diamond pattern. While he noted that this has historically marked a “top pattern among traditional markets,” he added that it might work as a bottom in cryptocurrency markets. Indeed, the crypto recently broke above the diamond pattern, leading Brandt to remark that a move to $0.4691 — some 50% higher than the current price point of just under $0.30 — may be inbound in the coming weeks, maybe months.

In terms of fundamentals, Ripple CEO Brad Garlinghouse recently reasserted that XRP has real-world viability, looking to MoneyGram, one of the world’s largest money remittance services provider, which is purportedly “experiencing real-time [transaction] settlement (around 60 seconds) in U.S. dollars to Mexican pesos.”

Photo by Peter Thomas on Unsplash

Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of EWN or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.