Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
A symmetrical triangle played out unexpectedly for XRP after its price suffered a near 11% decline over the past couple of days. Sellers punctured through an important price point of $1.18. This opened the gateway for an extended decline.
A few support zones were later called into action as XRP aimed to obtain some footing in order to minimize losses. A look at XRP’s 12-hour chart indicated ample areas of defense above $1 and potential buy zones for traders.
At the time of writing, XRP was valued at $1.18, down by 1% over the last 24 hours.
XRP 12-hour Chart
XRP’s breakdown thwarted prices back towards the critical price level of $1.09, backed by the daily 20-SMA (red). The short-term moving average often invites some buying pressure and the best-case outcome would require an immediate reversal in price. A comeback above $1.20 would lay the foundation for a rally towards $1.33 and $1.50 in the coming weeks.
Conversely, if the broader market triggers another drawdown, XRP could find support between $1.04-$1. A decisive close below this would result in losses all the way up to $0.90.
The Relative Strength Index formed lower peaks and was trading close to 50. Since 23 July, the RSI has avoided a dip below equilibrium. However, this trend was being threatened at press time. Short-sellers would once again be interested if the RSI moves below 45-40 in the coming days.
The Awesome Oscillator suggested that XRP’s bullish momentum was totally exhausted and the alt requires a fresh catalyst to spring another rally.
Amidst these findings, the ADX was an interesting observation. The index suggested that XRP’s downtrend was gradually losing steam. A move below 25 would play out in favor of the bulls and allow them some breathing room.
The XRP market was at a sensitive point, at press time. The RSI and AO were trading close to their half-lines and the next few sessions would give more clarity to the alt’s trajectory. Meanwhile, traders in anticipation of a reversal can long XRP at $1.09. However, it’s worth keeping in mind that such a trade would involve a high element of risk.
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