Analysis
Why XRP still has a long way to go before hitting $2
Posted:
| Last updated: January 30th, 2024
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
XRP’s price has been well under bullish control for a while now. Since climbing above its 200-SMA (green) and a bearish trendline that extended from its April-May highs, XRP seems to have renewed buying pressure. This may be a sign of further upside moving forward.
Nevertheless, the altcoin did face some near-term risks. However, buyers can be expected to overcome such hurdles and prepare for an interesting week ahead. At the time of writing, XRP was valued at $1.22, up by 8% over the last 24 hours.
XRP Daily Chart
Source: XRP/USD, TradingView
XRP’s latest retracement towards the $1-level completed a bull flag pattern from where another hike was building up in the market. The next immediate target lay at the 38.2% Extension ($1.37) of XRP’s late-July low. But, some risks were present here as well. The first lay at the 23.6% Fibonacci Level and the second at the 20 May swing high of $1.29. A close above these levels would confirm further northbound action from where the 50% and 61.8% Extension levels can be targeted.
The last bastion of defense lay at $1.70. This is from where XRP would face little to no resistance on its ascent towards the $2-mark On the contrary, corrections can be managed above $0.80-$0.91, a range that has served as the base for a bullish thesis.
Reasoning
While the indicators were in a strong position, a near-term retracement looked likely. This was largely due to the RSI’s overbought nature which required a healthy dip at slightly lower levels.
The MACD was on the cusp of a bearish crossover while its histogram noted receding bullish momentum. However, XRP’s uptrend was under no immediate threat of a complete reversal as the Directional Movement Index’s +DI was well above the -DI.
Conclusion
XRP’s hike towards $2 might seem like a certainty but bulls must not take a breather just yet. Certain Fibonacci levels are yet to be toppled and chances of a near-term decline are also high.
In case of an immediate retracement, traders could opt to go long at the aforementioned areas to capitalize on the projected upswing.
