Ripple's XRP Evinces Solid Uptrend; Russia, US CPI and Intel in Highlights

The cryptocurrency market has oscillated between highs and lows. On Sunday, the overall crypto market volume fell by 22.79%, to $69.25 billion. According to CoinMarketCap, the world's most popular cryptocurrency, Bitcoin, was up 1% at $42,390. The total volume of all stablecoins is now sitting at $55.84 billion, accounting for 80.63% of the crypto market's total 24-hour volume.

So far in 2022 (year-to-date), Bitcoin is down about 6%. However, that could be considered a good comeback considering its previous trajectory. Bitcoin has dropped about 35% since peaking at nearly $69,000 in November last year. Risk aversion grows, and the Federal Reserve and other global central banks begin to tighten financial conditions and remove pandemic-era liquidity from the system.

Since the altcoins are positively correlated with leading cryptocurrencies, the optimistic news and bullish recovery in BTC/USD improve the cryptocurrency market's trading sentiment.

On the other hand, the weekly overview is slightly more bearish, with every cryptocurrency but Ripple's XRP ending up in the red.

The volatility associated with cryptocurrencies has been on full display in recent weeks. Ripple, the sixth-largest cryptocurrency by market cap, gained about 9% in the past week. On February 14, XRP/USD peaked at $0.810 amid positive news and bullish technical analysis.

Ripple has gained approximately 42 % since January 24, after falling nearly 70% from its April high of $1.96. Likewise, Bitcoin, the largest cryptocurrency, has risen by around 33% since January 24, rebounding from a drop that cut its price in half from its November high. Ethereum, the second-largest cryptocurrency by market cap, has gained around 45% since January 24, after falling nearly 56% from its record high of $4,868 in November.

Cryptocurrency Price Heatmap | Source: Coin360

A series of positive news stories in the cryptocurrency market have fuelled an uptrend in digital assets. So let's take a look at some of the fundamental analysis.

During the previous week, Russia's government and central bank came to an agreement on regulating cryptocurrencies. Russia's government and bank are currently drafting a law that will classify digital currencies as an "analog of currency" rather than the digital financial assets. This process is scheduled to begin on February 18. Cryptocurrencies would, according to Russia, be useful in legal business only if they could be fully identified via the banking system or other authorized intermediaries.

According to Kommersant (nationally distributed daily newspaper), Bitcoin (BTC) transactions and cryptocurrency holdings are not forbidden in the Russian Federation; nevertheless, they must be conducted through a "digital currency exchange organizer" (a bank) or a licensed peer-to-peer exchange. This kind of regulations are better for crypto traders, as they prefer them over a complete crypto ban; hence, this news may add a long term bullish impact on the digital currencies.

The stronger US dollar is currently weighing on the XRP/USD coin. Last month, a key measure of inflation reached a near-40-year high. Economists believe that the United States will reach the peak of pandemic-era price increases in the early months of 2022.

Consumer Price Index | Source: US Bureau of Labor Statistics

According to the Bureau of Labor Statistics, the consumer price index increased 7.5% in the year ending January, unadjusted for seasonal fluctuations. This was the steepest annual price increase since February 1982, and it was worse than economists had predicted. Due to inflation being well above 2% (benchmark rate) and the labor market remaining strong, the Federal Reserve believes it will be reasonable to hike the target range for the federal funds rate soon.

According to the recent FOMC statement, the central bank intends to decrease its securities holdings by adjusting the funds to reinvest the principal payments received from securities held in the System Open Market Account. The $8.9 trillion balance sheet reduction will begin after the interest rate hike. Moreover, during a virtual press conference, Powell emphasised that the labor market and economy are strong, so there is no reason to postpone rate hikes.

The Federal Reserve Chair expressed concern that high inflation levels would persist and noted that officials have not made any policy decisions because they need to be "nimble." Thus, To combat hyperinflation, central banks typically tighten monetary policy. Having said that, the likelihood of the US Federal Reserve raising interest rates remains high. Consequently, the stronger dollar is acting as a headwind for XRP/USD coin.

Intel stated on Friday that it plans to develop new "energy-efficient" semiconductors for crypto mining as the chipmaker seeks a larger role in the rapidly growing market. According to Raja Koduri, general manager of Intel's accelerated computing systems and graphics group, the company plans to release a new "blockchain accelerator" later this year.

Intel stated that it has already signed major customers, including Block, the fintech firm formerly known as Square, which has shifted its focus to cryptocurrency. Intel's emphasis on energy efficiency underscored growing concerns about the environmental impact of cryptocurrency mining.

This active role of chip giant Intel contributes to further optimization in the crypto investors, driving uptrends in cryptocurrencies' prices.

That's all on the fundamental analysis side, let's have a take on the weekly technical outlook.

Ripple's XRP is trading with a bullish bias at the $0.789 level, facing immediate resistance at the $0.923 level. On the daily timeframe, XRP has formed a symmetrical triangle pattern limiting XRP price action. The downward trendline is extending strong resistance at $0.9235.

At the same time, the 50-day exponential moving average supports the XRP/USD at the $0.700 level. In XRP, the closing of candles above this EMA (blue line) signifies that the market will go up in the near future.

A surge in demand can slice through resistance level to reach the $1.104 level. A break above the $1.104 level adds bullish sentiment and can give further room for an uptrend until the triple top level of the $1.354 level.

Ripple Price Chart on the Daily Timeframe | Source: XRP/USDT

On the downside, the triple bottom pattern acts as major support at the $0.586 level. Therefore, a bearish crossover under a support level of $0.700 boosts bearish sentiment and can expose the XRP/USD price towards the $0.586 level. Further selling pressure can cause a $0.586 breakout and lead the XRP price towards the $0.427 or $0.249 support zone. Considering the market volatility and risks associated, investors should carefully make an investment decision, especially to trade price dip in crypto-asset XRP.

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