Ripple (XRP) bears seem to be losing interest in shorting this cryptocurrency. The bearish resolve has weakened overall as the market is now due for a recovery and the bears know it. However, there are other reasons why the bears do not feel confident anymore in shorting Ripple (XRP). There is a lot of interest in Ripple (XRP) and as we have seen in the past, Ripple (XRP) may not necessarily follow the rest of the market. This is a big problem for bears who want to capitalize on the aggressive fall in cryptocurrencies during a Bitcoin (BTC) crash. However, that is not all. Despite its series of overextended rallies, Ripple (XRP) is showing no signs of a slowing down. Furthermore, it is showing mixed signals on its charts.
If we look at the above daily chart for XRP/USD, we can see that Ripple (XRP) is forming a major bear flag. In any other market, this would be taken as a strong sign of weakness and could very likely lead to significant downside. However, in the cryptocurrency market you never know whether this pattern is actually supposed to trigger a price drop or serve as a bait to lure some greedy bears to their own slaughter. In itself, a bear flag is a strong sign of an imminent price drop but the problem with focusing too much on one pattern is that we ignore the rest of the technicals. This is why rather than adopting a pattern recognition approach in this market, it is best to adopt the more skeptical approach of elimination where you eliminate possibilities that you hold a natural bias towards.
In this case, our natural bias points to a price drop following completion of the bear flag. However, if we look at the RSI for the above chart, we see something very interesting. As it happens, the RSI for XRP/USD on the daily time frame has broken its near term resistance but not a long term resistance. The RSI is currently trading between the two resistances. Since the near term resistance was broken, it has now become a support. This means that as long as the RSI remains between these two lines, the price is expected to trade sideways or do nothing significant. Another more important conclusion we can derive from this is that as long as the RSI remains below the two lines, we will not see Ripple (XRP) rising or falling aggressively. That being said, Ripple (XRP) will be expected to take a decisive direction around mid December.
The number of shorts for Ripple (XRP) as now reached a historical resistance and is bound to fall drastically. The chart for XRPBTCShorts shows that Ripple (XRP) might have another rally against Bitcoin (BTC) yet despite the XRP/BTC chart saying otherwise. This whole confusion around Ripple (XRP)’s independent moves has made a lot of bears uncertain regarding the future price action of Ripple (XRP). It is hard to tell whether Ripple (XRP) may rise with the rest of the market or hold its ground as the rest of the market falls. This uncertainty has recently made the bears a lot more cautious when it comes to shorting XRP. For Ripple (XRP) investors this is a good development as it means less sell pressure on the cryptocurrency which means it can continue to rise in line with the enthusiasm of its loyal community.