Ripple price (XRPUSD) is down by about 0.65% today. The currency is trading at $0.2313, which is still higher than yesterday’s low of 0.2190. It remains down by almost 20% this month.
Ripple and other digital currencies have had a difficult time in September. In addition to Ripple’s 20% decline, Bitcoin, Ethereum, and Litecoin have dropped by more than 8%, 20%, and 28%, respectively.
This decline has mostly been because of the overall weakness of the financial sector and the relatively strong dollar. During the month, indices like the S&P 500 and Nasdaq 100 have all dropped by more than 8%. The decline of these indices is mostly because of the tech sector, with companies like Tesla and Apple falling further.
Stocks are not the only assets that have underperformed this month. Other safe-havens like gold and silver have fallen by more than 20%.
At the same time, the dollar has been relatively stronger. The dollar index, which measures the performance of the greenback against most peers has jumped by more than 2%.
Therefore, we can see that Ripple price has fallen because of the overall weakness of the financial market and the stronger dollar. Analysts are torn about whether these dynamics will continue. For example, in a report yesterday, analysts at UniCredit said that they expect the dollar weakness to resume in the near term.
However, this may not be the case, with the rising risks in the market. The dollar is being supported by the risks of the upcoming election and the rising number of COVID cases in Europe.
The daily chart below shows that Ripple price has fallen from a high of $0.3281 to a low of $0.2200. During this decline, the price has formed two bearish continuation patterns that are shown in green. The price remains below the 20-day and 10-day exponential moving averages. Interestingly, it has found support at the 50% Fibonacci retracement level. Therefore, I suspect that the pair will remain in a downward trend as investors aim for the next support at the psychological level of $0.200.
On the flip side, a move above $0.25 will invalidate this trend. This price is slightly above the two moving averages and is also an important psychological level.
