XRP price must break this key resistance to regain bullish momentum
XRP holders are still struggling around the $0.30 area while the majority of the cryptocurrency markets are euphoric with Bitcoin (BTC) price surpassing $40,000.
BTC price is currently over 100% higher than the previous all-time high in 2017, while XRP’s price is still down more than 90% from the all-time high in 2017. A lawsuit from the SEC against Ripple is certainly not bullish and is the primary reason for this overall weakness as this is prompting some exchanges to delist.
However, the chart might give some potential bullish outlook for the short term period if XRP’s price breaks several crucial resistance levels.
Resistance at $0.32-0.345 must break for more upsid
The XRP chart shows a very odd price pattern, as XRP’s price flipped the $0.21 area for support beautifully in 2020. This support/resistance flip caused a breakout above the significant resistance zone at $0.32-0.35. This breakout led to a run toward the $0.80 region, one of the most significant surges of XRP in recent years.
However, fundamentals kicked in as the SEC unveiled a lawsuit against Ripple, causing the price of XRP to tumble down into the range.
Now, the structure itself is destroyed and looks quite odd to chart on. Regardless of that bizarre move, crucial and beneficial levels can still be determined from here.
The critical level to hold for the bulls is the range low at $0.21-0.23, which once again provided a support in recent weeks.
Yes, the candles dipped below $0.21-0.23. However, the candle closes were above, indicating that support was found for XRP.
On the lower time frames, the $0.295 area is critical
Traders often zoom in to lower time frames to spot critical levels. Based on the higher time frames, critical levels are defined at $0.21-0.23 and $0.32-0.35 as support and resistance zones.
However, the 1-hour chart shows another critical level. This level is the $0.28-0.295 zone, marked in grey on the chart.
As long as that sustains support, multiple tests of resistances could occur. As the saying goes, the more often a resistance gets tested, the weaker it becomes. Therefore, a breakout toward $0.50 is in play.
On the other hand, if the $0.28-0.295 loses support, the next support area is the higher time frame support between $0.21-0.23. This area is also the range low throughout 2019 and 2020 and could usher in a more extended accumulation period for XRP.
XRP/BTC pair get clobbered
The XRP/BTC pair looks disgusting as it has been making new lower lows since the peak high in January 2018.
Hence, there are no arguments to be found for taking any position in XRP. However, there are some arguments to look for a potential reversal. One of them is the heavy increase in XRP trading volume recently, indicating that traders are accumulating the cryptocurrency.
This one could turn into a bull cycle once more if XR price flips the previous support levels at 0.00001550, 0.00002050. 0.00002350 sats for support.
The final argument is to watch for a potential bullish divergence on the daily, 3-day, or weekly timeframes. Once that starts to happen, a reversal could be near for XRP. However, until then, it’s still in a very precarious situation with a bearish outlook.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Credit: Source link