Assessing if XRP has potential to rebound from this defending zone
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.
The 61.8% Fibonacci level held up quite well to propel a strong reversal in favor of the bears. As a result, XRP’s previous up-channel breakdown transposed into a down-channel (yellow) trajectory in the past week.
Meanwhile, the buyers found a close above the basis line of the Bollinger Bands (BB) while inflicting a breakout of the down-channel. But the 23.6% Fibonacci level has suppressed the recent buying pressure.
A close above or below the basis line of BB would be critical to determine the upcoming moves. At press time, XRP traded at $0.3155.
XRP 4-hour Chart
The recent down-channel movement forced XRP to drop below some vital price points that the coin reclaimed last week. The alt marked an over 16% retracement from 8 July and matched its three-week low on 13 July.
Over the last day, the altcoin rebounded from the 16-month support near the $0.3-mark. But the 23.6% Fibonacci resistance eased the breakout push above the down-channel.
With the 50 EMA (cyan) posing recovery hurdles, the recent pullback could aid the sellers in retesting the upper trendline of the down-channel. In this case, XRP could eye to bounce back from the $0.31 zone in the coming sessions.
The Point of Control (POC, red) could lay a foundation for the buyers to step in and retest the 23.6% level near the $0.324-mark. An immediate recovery above the basis line would help the buyers test the 23.6% level in the $0.32-region.
The Relative Strength Index (RSI) continued to display a mild bearish bias after failing to sustain itself above the midline. A continued plunge could delay the robust recovery efforts on the chart.
The On-Balance Volume (OBV) saw lower troughs over the few days and resonated with the decreased buying pressure. But any revival from the immediate trendline support could affirm a bullish divergence.
XRP’s fall below the basis line of BB could present a rebounding opportunity for the buyers. The potential of bullish divergence on the OBV would further heighten these chances. The targets would remain the same as above.
However, keeping an eye on Bitcoin’s movement and the broader sentiment would be essential to determine the chances of a bullish invalidation.