This was an ugly week in cryptocurrencies, especially in top altcoins like Ripple. Bitcoin lost 10 pct on the week. As Bitcoin loses all volatility it is the top altcoins that were most volatile. There is a good reason why we said that Ripple is the new Bitcoin. Ripple lost 30 pct top to bottom this week before recovering in this morning’s Asian trading session. Is there any damage for Ripple particularly?
As exlained in Why Are Crypocurrencies Falling With The Global Market Sell-off it is the correlation between the Nasdaq and the crypto market that is the underlying market dynamic to trigger weakness in crypto this week. The chart embedded in the article mentioned in that article shows the correlation between the Nasdaq and Bitcoin: “Only twice in the last 12 months have we seen a divergence which typically tended to last for maximum one month.”
We concluded: “The Nasdaq fell sharply this week, and, in doing so, broke the summer of 2016 uptrend. This is not a catastrophic event, but there is some damage done and it needs time to recover. In other words it’s not the global market sell-off that pushed crypto prices lower, but primarily the Nasdaq tech stock weakness.”
Ripple, in particular, fell 30 pct between Monday and Thursday. On Thursday night, during the Asian trading session, it recovered sharply.
The million dollar question of course is whether this recovery will hold.
Why is this important? The chart with our annotations shows the importance. The sell off especially on Thursday October 11th broke below this important support level near $0.41 (light blue bar annotated on Ripple’s chart). The recovery of this morning, however, brought Ripple back into its support area.
In our own words the sell-off lasted for only one day, and, potentially, this might appear another failed breakdown.
And this is likely the story of the last few weeks after Ripple’s giant breakout on September 20th: Ripple goes from one failed breakout to another failed breakdown.
We believe it suggests there is lots of buying pressure but not yet supported by a large group of powerful investors. We believe for instance that Bakkt and the Nasdaq will bring institutional investors in crypto and Ripple, and help its price rise to new highs. We are not there yet. It might be the next catalyst for the crypto market, but, visibly, there is some more time needed.
For now, we remained astonished by the stream of amazingly great things that Ripple is doing. We are convinced that it is a matter of time. It’s not ‘if” but “when” Ripple will do its magic again. Until then it is wise to follow key price levels as well as Ripple’s amazing accomplishments.
We firmly believe Ripple is the top crypto company in the world!
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