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Buying or Shorting Ripple and Litecoin? Technical support & resistance

May 13, 2022 13:24
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ripple,

Today, Short Selling will talk about the latest important news connected with Ripple (XRP) and Litecoin (LTC) and where the price of these two cryptocurrencies could move in the upcoming period. The prices of most public cryptocurrencies have collapsed as the impact of the Russian-Ukrainian war and the rising risks of the recession continue to worry investors.

The U.S. Federal Reserve raised the interest rate by 50 bps last week, and investors are worried that an aggressive interest rate could tip the economy into recession. Federal Reserve Chair Jerome Powell said that he would support a 50-basis-point interest rate increase in June and July, which confirms that the Federal Reserve could be more aggressive than expected in raising interest rates to combat inflation.

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According to some research, traders are pricing in a 61% chance of a 75 basis point hike by the Fed in June, and there's really a lot of uncertainty around the Fed right now. Risk-on assets tend to suffer in such conditions, and we would probably see new lows for the cryptocurrency market in the weeks ahead.

Bitcoin has fallen to its lowest crypto market value since January 2022, and it is now worth half the value it was just six months ago. Galaxy Investment Partners CEO, fund manager, and trader Mike Novogratz said that there is more “damage to be done” when talking about the cryptocurrency market. Mike Novogratz said:

“The crypto market has been increasingly tracking the stock market lately, which, combined with more mainstream adoption and the slumping prices we've seen to start the year, makes it even more intertwined with macroeconomic factors. Cryptocurrency investors should not expect a speedy recovery.”

After hitting recent highs above $130, Litecoin (LTC) has encountered losses of more than 50% in less than several weeks. The price has stabilized now above $60, but a break below the $50 level would indicate that Litecoin (LTC) could probably test the $40 support. Ripple also remains under pressure, its price has weakened from recent highs above $0.90, and for now, the risk of further decline still persists.

Bearish traders who are already holding a position in a Ripple or Litecoin can feel confident the downtrend will continue unless the cryptocurrency makes a higher high. The price of these two cryptocurrencies is also in correlation with Bitcoin, and if the price of Bitcoin drops below $25000 support, we can see new lows for Litecoin (LTC) and Ripple (XRP).

Technical analysis of Litecoin (LTC)
Litecoin has weakened from the recent high above $1300, and for now, everything indicates that we could see even lower prices for this cryptocurrency. The price of Litecoin currently stands at around $64, and at this value, the total market cap of Litecoin is approximately $4.56 billion.

If the price drops below $40, which represents very strong support, the next target could be located around $30 or even below. Litecoin (LTC) remains under pressure; still,  if the price advances above $100 resistance, the next target could be located around $120.

Technical analysis of Ripple (XRP)
Ripple has collapsed from recent highs above $0.90, and for now, everything indicates that we could see even lower prices for this cryptocurrency. Risk aversion continues to dominate financial markets, and according to some analysts, cryptocurrency investors should not expect a speedy recovery.

ripple graph

On this chart (the period from July 2022), I marked current support and resistance levels to help traders understand where the price could move. The more often price tests a level of resistance or support without breaking it, the stronger the resistance or support area is. The current support level is $0.30, and if the price breaks this level, it would be a “SELL” signal, and we have the open way to $0.20. Ripple remains in the “bearish phase”; still,  if the price advances above $0.60, the next target could be located around $0.80.

Conclusion
The price of most public cryptocurrencies has collapsed in a relatively short period, and some market observers have expressed concerns that the cryptocurrency market may have an even bigger drop in the weeks ahead. Investors are worried that surging inflation coupled with the Fed's policy moves, the war in Ukraine, and the latest COVID-19 lockdowns in China could spark a global economic slowdown. Risk-on assets tend to suffer in such conditions, and we would probably see new lows for the cryptocurrency market. Bearish traders who are already holding a position in a Ripple or Litecoin can feel confident the downtrend will continue unless the cryptocurrency makes a higher high.

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