XRP Should Only Account For 1% Of Portfolios Suggests MPT Theory
The founder of Into The Cryptoverse, Benjamin Cowen, tweeted earlier today that Modern Portfolio Theory (MPT) suggests that a portfolio which maximizes an investor’s risk-adjusted returns comprises only 1% of Ripple (XRP). In the post, he shared that the ideal portfolio is 72% Bitcoin (BTC), 27% Ethereum (ETH) and 1% XRP.
If you add #XRP, MPT says the portfolio that maximizes the Sharpe Ratio is:
72% #BTC
27% #ETH
0% #LTC
1% #XRP pic.twitter.com/dTe44dEWDy— Benjamin Cowen (@intocryptoverse) September 7, 2023
Meanwhile, the cryptocurrency market tracking website CoinMarketCap indicated that XRP was changing hands at $0.5012. This was after the remittance token’s price had slipped 0.30% during the past 24 hours of trading. In contrast, BTC and ETH both printed gains during the same period. BTC was up 0.07% and ETH’s price had risen 0.46%.
Looking at XRP from a technical perspective, the cryptocurrency established a higher low yesterday, continuing its gradual positive trend it has been in over the past 2 weeks. During the last 3 days, however, XRP’s price had been in a correction phase. Consequently, XRP’s price may be at risk of dropping below the recently-formed trend line.
A breach below this trend line would introduce the cryptocurrency to the risk of descending to the next pivotal support level at $0.4715 over the ensuing days. This bearish thesis will be invalidated if XRP is able to close a daily candle above the 9-day EMA line at around $0.5080.
Thereafter, the logical next step would be for XRP’s price to challenge the resistance level at $0.5380, which coincided with the 20-day EMA line. A daily candle closure above this crucial level would effectively clear the path for XRP’s price to continue its ascent towards the next significant obstacle at $0.5890.
If this bullish momentum remains robust enough, it may even propel XRP’s price to reach $0.6405, overcoming potential profit-taking activities that might arise in the following two weeks.
Conversely, another rejection from the 9-day EMA line could prompt XRP’s price to retreat and retest the positive trend line that formed on its charts.
Disclaimer: The views and opinions, as well as all the information shared in this price analysis, are published in good faith. Readers must do their own research and due diligence. Any action taken by the reader is strictly at their own risk. Coin Edition and its affiliates will not be held liable for any direct or indirect damage or loss.