Ripple price did not go anywhere for the entire month of August. Just like Bitcoin, it consolidated on a horizontal range, a range that can break in both directions. As such, it is wiser to wait for a breakout to come before deciding to take a trade.
Ripple Follows Bitcoin’s Lead
There is a strong interest in the crypto digital space in the last years, and the pandemic drove even more people to it. Bitcoin is the number one crypto coin, but Ripple and a few others also offer diversification benefits to the investment community.
Speaking of diversification, the best way to obtain diversification benefits is to dedicate a part of the portfolio to alternative investments. Next, diversify within the class. For instance, diversify within the traditional and digital alternative space. Finally, diversify in the digital space by adding multiple currencies to the portfolio.
Biggest Risk to the Crypto Space
The biggest risk to Bitcoin, and to the other cryptocurrencies too, comes from the regulatory space. This is the wild card that keeps investors away.
Also, a growing derivatives or futures market means that professional investors may enter the market. Back in the day when Bitcoin almost reached $20,000 it reached the top right when one of the biggest futures exchanges offered contracts on Bitcoin. It later withdrew them out of lack of interest from clients, but it cannot be a coincidence.
Bullish flag or double top? This is the question when looking at the Ripple price on the daily chart. To trade them both, consider waiting for the price to move first, and trade later. This way, the breakout signals the entry.
On the upside, wait for Ripple to make a new high before going long. Place a stop-loss at the lowest edge of the horizontal channel and target 1:2 risk-reward ratio.
On the downside, consider a short on a break of the 0.26 level. The double top signals a move to 0.17 and requires a stop to 0.32.