While XRP prepares for recovery, are long bets ideal at this time
Buying resilience at the $0.72-support has rewarded XRP over the past day. After traversing past a bearish down-channel setup, the alt was well-positioned to challenge its Point of Control (POC, red).
Any potential breaks above the POC would open a route toward the 38.2% Fibonacci resistance, provided buying pressure does not wobble at important price levels. At press time, XRP was trading at $0.767, up by 3.66% in the last 24 hours.
XRP 4-hour Chart
The sell-off initiated at the $0.9-level transpired into a 24.45% plummet in just two weeks. Thus, after falling below its long-term POC at the $0.76-mark, XRP plunged to touch its seven-week low on 12 April. Post that, the bulls stepped in to defend the 10-month $0.69-support.
Consequently, with an over 12% weekly revival, XRP hovered around its POC after struggling to push above the 38.2% level. Over the last few days, the digital currency saw a descending broadening wedge (white, reversal pattern) setup.
Post its recent gains, the 20 EMA (red) managed to float above the 50 EMA (cyan) whilst slightly looking northwards. Should the current resistance at the $0.77-mark stand sturdy, XRP could enter a tight phase before propelling a strong change in its trend.
A close above the POC would enable the alt to test the $78-zone before a likely reversal. A fall below its EMAs could be detrimental as the sellers would aim for a retest of the $0.73 base before permitting any comeback to the bulls.
The Relative Strength Index highlighted a short-term uptrend as it pushed above its equilibrium. A move above the 56-mark would brace the XRP for a strong rally toward the $0.78-zone.
But with the OBV marking higher peaks in the last two days, the situation could be tricky. If the price closes below the POC, it would result in a hidden bearish divergence with the OBV.
To top this up, the ADX line was on an extended southbound course and kept iterating the weak directional trend for XRP.
XRPs current picture was rather hazy. The investors/traders should watch out for a close either above or below the POC. A close above this level would most likely cause a retest of the 38.2% level before it enters a tight phase. On the other hand, a close below this level could result in a continued downtrend before a bullish resurgence.
Moreover, keeping an eye on Bitcoin’s movement and the broader sentiment would be important to complement the aforementioned analysis.