Analysis
These near-term support levels could be key for an XRP rally
Posted:
| Last updated: January 30th, 2024
XRP was forming its third red candle in a row as the alt continued to pare gains after a run up to $1.23. Moving forward, the spotlight would be on the zone between the daily 20-SMA, 200-SMA and the 50% Fibonacci level.
A rebound from this confluence can instigate a fresh rally for XRP once the broader market turns risk on. At the time of writing, XRP traded at $1.10, down by 5% over the last 24 hours.
XRP Daily Chart
Source: XRP/USD, TradingView
The last three days accounted for near 14% losses in the XRP market as the alt approached a supply region of $1.22. In fact, some more losses can be anticipated in case bulls are unable to offer any support at the 38.2% Fibonacci level.
However, the combination of the 20-SMA (red) and 200-SMA (green) above the 50% Fibonacci level can allow buyers a comeback. Further, a rally could ensue in case XRP is able to hold above this confluence, once capital inflows are observed in the broader market.
On the other hand, a close below the 61.8% golden Fibonacci Retracement level could spell trouble for XRP. The alt would be severely exposed to its early August levels of $0.78 and $0.75 in such a scenario.
Reasoning
XRP’s indicators were relieving their bullish positions as the alt closed in on its immediate support. The RSI continued to dip towards its half-line from 62. Now, if the RSI is able to find support around the mid-line, XRP could preserve its uptrend and eye the next leg upwards.
Similarly, the Directional Movement Index’s +DI inched closer to the -DI but a bullish trend was still active in the market. Finally, MACD hovered around its mid-line and presented a bullish-neutral reading as well.
Conclusion
XRP could mount a comeback above the $1.20-mark provided the price holds above some key areas. The 20-SMA and 200-SMA would be ready to offer support in case downwards pressure continues over the near-term. However, this bullish outlook would be negated in case bears are able to slice below the 61.8% Fibonacci level.
