Ripple's Impressive Recovery Amid Stock Market Weakness
What an ugly start of the week in cryptocurrencies, especially in top altcoins like Ripple. Bitcoin went 10 pct lower during the week. As per our Bitcoin forecast, we believe that Bitcoin is losing its traditional volatility but top altcoins remain very volatile. Ripple lost 30 pct top to bottom this week before recovering on Friday. Is there any damage to Ripple particularly?
As explained in Why Are Cryptocurrencies 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 first chart below 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.”
The Nasdaq fell sharply this week, and, in doing so, broke the summer of 2016 uptrend. This is not necessarily the 2018 stock market crash, similar to the 2008-alike scenario, 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.
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Ripple fell 30 pct between Monday, October 8th and Thursday, October 11th. On Friday morning it recovered sharply. There is a good reason why we believe that Ripple is the new Bitcoin.
As said many times before only specific critical price points on any chart should be watched. Ripple's current price level is one such example. Ripple's chart below makes our point. The sell-off, especially on Thursday, October 11th, broke below the important support level near $0.41 while one day later Ripple got into its support area.
In our own words the sell-off lasted for only one day, and, potentially, this might appear another failed breakdown. This marks another failed attempt to break out or break down. Ripple registered already several such examples since its giant move on September 20th.
It suggests to us that trading in Ripple's XRP token is very active and that there is lots of pressure on both sides. This should not come as a surprise, as many Ripple holders (read: weak hands) are happy to sell XRP tokens on a price rise as they are not able to stand the volatility nor do they have sufficient patience. We see over and over again that crypto investors lack patience and are scared to death when prices fall.
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We firmly believe that Ripple is on its way to become the top crypto company in the world! That's what we continuously write to our premium crypto subscribers, and they get much more detailed insights on this topic. Once the dust settles in the crypto market we will see much higher XRP prices, and many will be chasing prices higher again. That's the cycle of markets, that's the emotional game.
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