Yerevan (CoinChapter.com) — Ripple’s XRP and Cardano’s ADA stand among the biggest cryptocurrency market losers this week as fears of anti-altcoin season hit traders’ conscience.
The declines appear in the wake of an ongoing correction in the Bitcoin market. The flagship cryptocurrency shed more than 20 percent of its value after establishing a record high of $64,899 last week (data from Coinbase).
Since Bitcoin remains positively correlated with most of its rival assets — being the center of crypto liquidity, its downside correction triggered a similar response from the altcoin market. XRP and ADA appeared caught in the short-term bearish storm.
CoinChapter.com presents you with a brief outlook of the said altcoins and what they hold for investors in the sessions ahead.
XRP: A Crucial Support Held
XRP, the native token of the Ripple blockchain, was briefly up over 800 percent on a year-to-date (YTD) timeframe as of April 14. Traders flocked back into the controversial token after assessing a series of legal wins for its backers, Ripple Labs, as they fought a lawsuit filed by the US Securities and Exchange Commission (SEC).
The agency alleged that Ripple’s top management sold illegal securities to its early investors late last year using XRP. Their accusation prompted many US-based exchanges, including the Nasdaq-listed Coinbase, to remove XRP from their trading platforms. It also led the Ripple token’s price lower by 78 percent during the November-December 2020 session.
The selling pressure returned in the second quarter of 2021 over XRP’s overvaluation fears. Traders apprehensively secured their profits at the token’s recent higher highs, while bids for further upward XRP/USD dropped. The pair declined by almost 42 percent from its latest top, as a result, and now sits near crucial short-term support defined by its 20-day exponential moving average.
Should XRP/USD break below 20-DMA, its next downside target would shift towards the 50-day simple moving average (50-DMA; the blue wave). An additional support confluence there comes from the 23.6% Fibonacci retracement level of $0.759.
Meanwhile, a strong bounce off the 20-DMA wave would have the XRP/USD rate test the 50% Fib level of $1.447. It has an upside target near $1.755.
ADA: A Bullish Pattern Brewing
ADA rose majorly in the first months of 2021 because of its parent blockchain Cardano’s growing rivalry with Ethereum, the leading smart contracts platform currently grappling with higher gas and transaction fees issues. That paved the way for many rivaling blockchain projects to shine, leading to speculative growth in the native tokens’ markets.
Cardano also went through a much-anticipated update, dubbed as “Mary,” that allowed users to create non-fungible tokens — digital files representing ownership. The NFT mania also contributed to the rise in ADA/USD exchange rates all across 2021. At its best, the pair was bidding for as high as $1.57, up 762.33 percent YTD.
The last week saw ADA shedding a considerable portion of its gain. The token fell by a maximum of 33.64 percent before recovering higher in the last three daily sessions. Nevertheless, it looked like an attractive asset to sell for lucrative profits. Cardano has no major news coming, at least in April.
Yet, technically, ADA/USD hints at a bullish breakout.
That is because ADA now trends inside an Ascending Triangle pattern. They are bullish continuation patterns, confirmed after the altcoin moves upward as it tests a horizontal trendline resistance repeatedly for a breakout move. The altcoin typically breaks above the price ceiling. It then rises by as much as the widest distance between Triangle’s upper and lower trendlines.
That said, ADA/USD now eyes a run-up towards $2.22.