Key Takeaways
- The XRP price broke out from a long-term descending wedge pattern.
- Then, XRP was rejected by a critical resistance between $2.52 and $2.73.
- Will XRP break out and move to new highs, or has it reached a local top?
The XRP price has increased since it prevented a breakdown on April 7, accelerating its upward movement in the last two weeks.
Earlier last week, Ripple published its Q1 market report , highlighting positive news such as the end of the SEC vs Ripple lawsuit and increased institutional demand for XRP.
However, the price has stalled at a critical resistance, a breakout above which will confirm the bullish trend reversal. Will XRP break out, or has the rally lost momentum? Let’s find out.
XRP Reaches Range High
The weekly time frame analysis shows the XRP price has increased since bouncing on April 7 (green icon).
XRP had fallen below the $2 horizontal area, but the price created a long lower wick and reclaimed it.
As predicted in March, the XRP price created a higher low after the reclaim and reached the $2.55 resistance area.
The $2.60 area is pivotal because it is the 0.5-0.618 Fibonacci area in addition to being horizontal resistance.
These Fibonacci levels often act as the top if the movement is corrective, so whether the XRP price breaks out will have implications for its long-term trend.
Technical indicators lean slightly bullish. The Relative Strength Index (RSI) bounced at 50 while the Moving Average Convergence/Divergence (MACD) is close to making a bullish cross and is positive.
The weekly time frame analysis leans bullish, suggesting the XRP price will eventually break out. Let’s look at a lower time frame and see what happens next.
Is XRP Bullish or Bearish?
The shorter-term six-hour time frame does show some worrying signs for the future trend for two main reasons.
Firstly, the XRP price trades inside an ascending parallel channel, which usually contains corrective movements.
Secondly, a potential A-B-C corrective structure (green) has been developing since April 7, in which waves A and C are the same length.
If this bearish count is accurate, XRP completed wave C on May 12 (red icon), and the price has begun its downward movement today.
Bearish divergences in the six-hour RSI and MACD (orange) support this bearish XRP prediction.
Nevertheless, there is a bullish alternative. The XRP price may have completed a leading diagonal for wave one (green) and is now in the first stages of a wave three extension.
The sub-wave count is in black, predicting a similar short-term decline. Afterward, the price of XRP will resume its upward movement.
Since a breakdown from the channel will invalidate the bullish XRP outlook, whether the price breaks down will determine the direction of the future trend.
Critical Week Ahead
The long-term XRP analysis shows the price is at a critical resistance of $2.65. A close above that level will confirm the bullish trend reversal.
The short-term outlook gives two potential paths for the future movement. They hinge on a breakout or breakdown from an ascending parallel channel.
This week’s movement is critical since it can determine whether XRP has started a bullish trend reversal or has ended its relief rally.
Disclaimer: The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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