Ripple price unable to push higher and is in danger of forming a double top at 0.32. The rejection so far failed to break the higher lows series belonging to the rising trend, so bulls still have a point to bid for it at the current levels.
However, before trading Ripple or any other digital currency in the COVID-19 pandemic, some things are worth mentioning. Above all, the tight correlations seen between various financial assets.
Correlations to Consider when Trading Ripple
The first thing to look at when trading Ripple is…Bitcoin. Viewed by many as the primary digital asset, it drives the price action in the crypto universe. Bitcoin’s performance is the reason why many investors are drawn to the crypto market in the first place. Scared by Bitcoin’s huge surge, they look for other coins trading under-the-radar, and that may perform just like Bitcoin did back in the day.
The blue line on the chart below shows Bitcoin’s performance applied to the Ripple price chart. It reveals how closely Ripple follows Bitcoin.
Next in line is Bitcoin’s relation to gold. Lately, Bitcoin and gold move in a direct correlation. Except for the weekends when gold trading halts, the two assets move in a similar manner.
Finally, gold denominated in USD depends on what happens with the USD and the Dollar Index. Any bounce on the DXY triggers a bearish move in gold. That one triggers a bearish move in Bitcoin, and Bitcoin’s move affects Ripple price negatively.
Ripple Price Technical Analysis
If this is a double top, the best way to treat it is to wait for the market to break below 0.27. Next, place a stop-loss order at the highs and look for a risk-reward ratio of 1:2.
It also looks like a possible ascending triangle. If that is the case, the higher lows series should hold, and the short trade scenario will not be triggered. Therefore, on a break higher, consider buying a move above 0.33 with a stop-loss at the previous higher low and targeting a similar 1:2 rr ratio.