Ripple was previously consolidating inside a falling wedge pattern before breaking higher to signal a likely uptrend. Price is once again consolidating while waiting for more bullish momentum to kick in.
An upside break past the 0.2300 level could be enough to draw more buyers to the game and lead to another leg higher for Ripple. However, the 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. This suggests that the selloff is likely to resume at some point.
In addition, stochastic is turning lower from the overbought zone to indicate that bears are taking control of Ripple price action. RSI hasn’t quite reached overbought levels but is also turning lower so Ripple might follow suit.
Cryptocurrencies are still in demand owing to persistent risks of a North Korean missile strike, but the US dollar is putting up a good fight. Economic data turned out stronger than expected as the ADP non-farm employment reading showed a larger than expected gain while the Q2 GDP was upgraded from 2.6% to 3.0%.
Traders are starting to price in upbeat expectations for Friday’s NFP report and this might seal the deal for another Fed interest rate hike later this year. The FOMC is set to meet again next month and although odds of tightening in September have dropped, hopes are still up for December.
But if the jobs report turns out weaker than expected, odds of tightening and the balance sheet runoff could drop drastically and lead to a dollar selloff. Ripple could be poised to take advantage of this scenario, even as bitcoin is also attracting a lot of investor interest once more.
The company behind Ripple is focused on building a better bitcoin as it wants to handle transaction volume on a higher scale. The company approaches banks with its enterprise software, along with the Interledger Protocol. They propose a corresponding banking paradigm in which banks with no direct relationship rely on intermediaries in order to send payments to each other.