Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
While the altcoin market did see an extended rally, there was not much to write home about when it came to XRP’s movement. The altcoin seemed to settle within a tight channel after making its explosive move above 19 May swing low of $0.65 as buying pressure eased in the market.
However, consolidation just below its upper ceiling of $0.781 did indicate chances of a 20% hike in the coming days. At the time of writing, XRP was being traded at $0.706. The crypto held the sixth spot on CoinMarketCap’s crypto-rankings.
XRP Daily Chart
XRP’s support area of $0.50 has been tested twice since the 19 May crypto sell-off. The first drawdown came as a result of a symmetrical triangle breakdown while the other was due to the emergence of a down-channel. The price managed to reverse on both occasions and the most latest rebound led to a strong rally that pushed XRP towards the $0.785 price ceiling- A 57% increase when calculated from $0.50.
However, the 200-SMA (green) played spoiler and stalled XRP’s uptrend. This fueled lateral movement on the charts. This was further backed by low volumes and a downtick in buying interest.
The spotlight can now be shifted to the crucial support line of $0.65, a level that also saw some interplay with the 20 (red) and 50 (yellow) Simple Moving Average lines. A bullish narrative will still be active for XRP as long as it maintains losses above this line. Such a development could see XRP break north of $0.785 and head towards its next target of $0.92 in a best-case scenario.
The Relative Strength Index was trading above 50-55 and suggested that bulls still maintained an edge over the bears. Furthermore, the Directional Movement Index’s +DI also moved above the -DI as a favorable trend was still active in the market despite the dip. Warning signs emanated from the MACD which noted a gradual decline in bullish momentum.
Market control was not yet ceded to the bears, but traders must be cautious of a decline below $0.65 as this could open the doors for a sharper sell-off. Meanwhile, traders can wait for a breakout confirmation and long XRP once the price moves above $0.785. This could lead to a 20% hike towards the $0.92-mark.
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