Yerevan (CoinChapter.com) — And it happened! Dogecoin and XRP, two of the best performing top digital assets dropped hard as traders decided to realize their profits against an uncertain outlook for these super-pumped cryptocurrencies.
The DOGE/USD exchange rate slipped by more than 47 percent after establishing a top near $0.76 last Friday. Traders reduced their bids on the pair after Elon Musk appeared as a guest host on the Saturday Night Live. In there, he called Dogecoin a hustle, stepping away from his much popularized social media stance in favor of the cryptocurrency. Dogecoin had rallied by more than 19,000 percent in 2021 before the said correction.
Read more: Dogecoin Dives after Elon Musk Calls It A ‘Hustle’ on Saturday Night Live
As for XRP/USD, the pair plunged by up to 35 percent from its sessional high of $1.81 as euphoria around XRP’s parent company, Ripple Labs, settled down. Ripple Labs is battling a lawsuit filed by the US Securities and Exchange Commission (SEC) for allegedly selling illegal securities to its early investors in the form of XRP tokens.
More or less, both tokens responded to their respective technical setups in the previous sessions, showing that traders were more or less playing their bets according to historical price actions. Here are how they could perform during the current weekly session.
Dogecoin Holds Interim Support
Dogecoin crashed but found interim support near its 20-day exponential moving average. The previous two sessions saw bulls defending the price floor area. And on Tuesday, the scenario appeared the same: DOGE/USD held onto its support, now near $0.442.
That leaves the DOGE/USD rate with potential scenarios. Either the pair could continue breaking down and tests its 50-day simple moving average as the next downside target, or it bounces back strongly to reclaim previous highs, with the peak level of $0.76 in mind.
Fundamentals do not favor Dogecoin. Almost all the experienced traders realize that the token is pro-inflation due to its unlimited supply cap. That could keep it from becoming a macro asset especially in times when investors look for anti-inflation assets like bitcoin to safeguard their portfolios against the Federal Reserve’s aggressive quantitative easing programs.
All Dogecoin has Elon Musk as a star promoter. That does not make it a valuable token long-term.
XRP in Bullish Continuation Pattern
Unlike Dogecoin, XRP has some degree of legitimacy behind its recent price rally, even though it involves excessive speculation about Ripple Labs winning the SEC lawsuit. But on technical fronts, the cryptocurrency looks ready to post another upside move.
Read more: SEC to Disclose Its Internal Bitcoin And Ethereum Documents — How Does It Impact XRP?
So it appears, XRP/USD now trades inside a Descending Triangle pattern. Descending Triangles appear when an asset consolidates lower following a strong uptrend but maintains its bullish bias above a certain support level (the base trendline of the Triangle). Ultimately, the price breaks out north.
For this week, XRP/USD expects to hold the Triangle range, providing long opportunities on a rebound from lower trendline and short opportunities on a pullback from the upper one. In both cases, the target remains the other trendline.
Meanwhile, an upside breakout move promises to send the XRP prices as high as the maximum Triangle height. That is $0.68.
Editor’s Note
Kindly maintain stop losses.
Yashu Gola is a Mumbai-based finance journalist. He is profoundly active in the bitcoin space since 2014 – and has contributed to several cryptocurrency media outlets, including CoinChapter, NewsBTC, FxDailyReport, Bitcoinist, and CCN. Academically, Yashu holds a bachelor's in information technology, with majors in data structures and C++ programming language. He has also won the 'Atulya Award' for his efforts towards raising $100,000 for an India-based farming project.
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