XRP Melts To $2 Support Line Amid Strong Dollar
Ripple-based tokens melted towards the $2 support line as risk appetite dipped amid a stronger dollar that weighed down global currencies and assets, including Bitcoin.
Price Action
The altcoin’s recent trading activity has been relatively mild and its volatility has been limited to the $2–$3 range. The $2 support zone, which has historical significance as a previous swing high and a concentration of demand, is currently where the cryptocurrency is anchored. The RSI indicator, which shows equilibrium between buyers and sellers, has stabilized around 50, adding to the bullish outlook.
This positioning lays the groundwork for bullish momentum with the possibility of a breakout above the $3 resistance. Ripple may start a mid-term upward trend if such a narrative turns to reality.
Short sellers might push the price toward the $1.5 threshold, the next crucial support level, if the $2 support is not maintained.
Historically, altcoin has had a strong negative correlation with the greenback. The Dollar Index compares the dollar’s strength to other major fiat currencies in a bullish run.
The dollar’s strength mostly precedes President-elect Donald Trump’s inauguration in late January, when he has pledged several policies to boost the economy in the years to come. In contrast to cryptocurrencies, dollar-denominated assets gain appeal when the dollar appreciates.
Investors prefer traditional investments like U.S. treasuries, which provide returns when the dollar is on a bullish path
The market’s implausible response to macroeconomic policy uncertainties is the cause of recent selloffs. Notwithstanding U.S. inflation readings are nearly at the 2 percent annual benchmark, the Fed projects higher readings in the future.
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