XRP Faces a Big Obstacle After Whales Begin Sell-Offs
- XRP rose above the $0.50 psychological zone after its earlier 5.50% rise.
- Whales sold, and an overbought condition could lead the XRP price downwards.
- The bullish bias has not entirely been neutralized despite the current sellers’ presence.
Ripple (XRP) posted 5.50% gains over the last seven days as Bitcoin (BTC) led a significant crypto market recovery. The rise culminated in the token’s jump above the $0.50 psychological resistance.
At press time, XRP exchanged hands at $0.55. However, there could be some concerns as regards the XRP price action. On October 29, whale tracking platform Whale Alert revealed that XRP worth $14.82 million was transferred into the BitStamp exchange.
When a large transfer like this occurs, it is a sign of a notable sell-off. The selling pressure was evident in the XRP/USD 4-hour chart as the price trended downwards. However, XRP showed strength as the token resisted a sharp plunge.
Despite the stability displayed, XRP was still at risk of a nosedive. This was indicated by the movement of the Moving Average Convergence Divergence (MACD). At press time, the MACD was 0.0004.
While the MACD reading signals an increasing upward momentum, the 12-day (blue) and 26-day EMAs (orange) need to be observed. At the time of writing, the 12 EMA was above the 26 EMA, indicating that buyers outweighed sellers’ control. At the same time, the 26 EMA showed tendencies of crossing about the shorter period EMA.
XRP Trades Tight
Should the more extended period momentum exceed the shorter one, XRP could risk dropping back to $0.50. Another indicator in support of a price reversal was the Bollinger Bands (BB). As of this writing, the BB contracted, indicating how XRP’s volatility had reduced.
So, there is a chance that the cryptocurrency will continue trading within a tight range of $0.50 to $0.55. Furthermore, the upper band of the BB touched XRP at $0.55, meaning the token was overbought. Thus, a retracement is very likely to occur in the short term.
Meanwhile, the 9 to 20 EMAs indicated that XRP’s bullish thesis has not been completely neutralized.
This was because the 9 EMA (cyan) had crossed over the 20 EMA (yellow). Typically, if the 9 EMA is over the 20; the price is bullish. If the 20 is over the 9; the price is bearish. So, XRP’s current EMA structure means that a drawdown, if it happens, would only be mild.
However, it is important to mention that XRP would also need some buyer presence to ensure that the price remains above $0.50.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
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