Ripple price action showed a pullback overnight, as the crypto markets suffered a brief selloff before finding support quickly. Ripple price continues its positive correlation with Bitcoin prices, as the XRPUSD pulled back 3.11% overnight, before stabilizing and rallying 4.76% so far, as Bitcoin prices on the BTCUSD pair found support at $6596 after dropping nearly $400 in yesterday’s trading.
Market watchers expected Ripple price to suffer a brief pullback after several reports of possible whale sales hit the internet last week. However, it does not seem like this has materialized. However, there are reports that interest in cryptocurrency trading appears to have waned significantly, with Telegram groups that feature Ripple traders suffering a 63% drop in numbers, according to a table on the Twitter page of Aztec BTC.
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Ripple price action as captured on XRPUSD shows that price is in the consolidation area that forms a downward channel. When considered along with earlier bullish work seen in late March and early April, the pattern is that of a bullish flag. Today’s price candle took off from the channel’s lower border (which coincides with the 0.17952 support formed by the 18 December 2019 lows).
A bull flag usually resolves with a breakout. Such a move has the potential to test the 0.19589 resistance. This resistance is formed by the lower border of the bearish Kumo of 20-30 January 2020), as well as the cluster of highs of late December 2019 at 0.19859. Price projection from the breakout takes Ripple price to 0.23428. This move must overcome the resistance at 0.19859 and 0.21409 to materialize.
On the flip side, a breakdown of the channel consolidation area invalidates the bull flag and opens the door towards the support areas at 0.15972 and possibly the 0.14487 price level. Such a move would most likely result from a renewed selloff on Bitcoin, which could pull correlated assets along with it.