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Analysis

XRP: How traders can long here

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Source: Pixabay

An 18% hike in value from $0.697 to $0.84 was a much needed XRP rally, prior to which some questions were raised about the alts’ restricted movement. Its daily active addresses stood at a 3-month low and the Ripple V SEC lawsuit presented another dilemma. Nevertheless, BTC’s rise above $45,000 proved to be the catalyst for XRP, the result of which saw the alt finally close above its daily 200-SMA (green) for the first time in seven weeks.

XRP Hourly Chart 

Source: XRP/USD, TradingView

Following XRP’s rally, the $0.84 ceiling triggered an 8% decline in the market but prices formed a higher low at $0.76. Successive higher lows formed prior to this jump were used to plot out a lower sloping trendline. Similarly, the upper sloping trendline was used to indicate resistance at $0.84. Another barrier area lay just above this at $0.842 which also coincided with XRP’s 12th June swing high. Based on the ascending triangle plotted on the chart, a successful close above these levels would propel the digital asset  to its next swing high of $0.93- resulting in a further 10% hike.

Immediate breakout?

The 24-hour trading volumes noted a slight decline across exchanges as XRP approached its upper resistance. Moreover, the Squeeze Momentum Indicator noted a constant decrease in buying momentum while MACD halted its upwards movement.

The RSI even formed two lower peaks and indicated a bit of a bearish divergence. However, the overall picture of these indicators was still bullish as they traded above each of their respective half-lines. This meant that prices would continue to trade within the pattern in the coming hours but a breakout was still expected over a longer duration. In fact, a dip to $0.80 would even open up long opportunities for traders. To invalidate this pattern, bears must target a close below $0.778 support.

Conclusion 

XRP awaited another 10% surge on the back of an ascending triangle breakout. Its indicators did not seem to back an immediate hike just yet but still maintained bullish territory. In case of a slight decline, traders can capitalize on this pattern by longing XRP at $0.80.

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A business graduate with a keen interest in emerging markets across South East Asia. As a financial journalist, he covered stocks and market reports across Australia and New Zealand as well.