The beginning of 2022 is not being anything positive for the price of BTC which has been registering increasingly low highs and apparently without the strength to start a new bull rally.
So, for the analyst Filip L., so is Ripple (XRP) which would also be ready for an additional 25% wax drop.
Ripple ready to drop
Therefore, to justify his prediction the analyst points out that the price of XRP currently ranges in a tight pennant with signals pointing to the downside as the bulls fail to hold the $0.78 support level.
“Expect some hesitation around $0.70, but ultimately the price will want to see $0.58 as a final station for the bears’ short-term short positions,” he said.
So, according to him, while a pennant can still go either way, the bulls seem unable to hold support at $0.78 inside the pennant.
Therefore, he highlights that this should be perceived as a bearish signal, along with the Relative Strength Index fading from 50 and pointing to more downside risk.
“If the bulls cannot keep the XRP price action on that upside, expect to see a rapid dip in two phases – the first, a stop around $0.70, which was the low of the 10th of January, and, therefore, it means a new test of this year’s low”, he said.
So after that he points out that traders can expect new lows to be set for the year as bears will want to keep their gains locked in until $0.58.
“This level has historical significance and is also the S1 monthly support level,” he said.
However, he also points out that an upward blowout may still be on the cards when global markets can find it within themselves to finally shake off the negative sentiment surrounding the prospect of the Fed’s rate hike policy to contain inflation.
“Expect that once that happens you will see a quick reversal to $0.84 as the pennant breaks to the upside and the $0.78 level holds support again,” he said.
So, in this bullish case, he points out that investors will rush to push price action back to $0.88 – with the 55-day Simple Moving Average (SMA) getting in the way – as the Relative Strength Index ( RSI) quickly returns to trading above 50.
“The point where the 200-day index and the 55-day SMA cross at $0.95, however, provides a possible entry level for the bears to start a fight.”