What's Next After XRP Price Breakout? | Credit: Hameem Sarwar
Key Takeaways
- The XRP price broke out from a descending wedge.
- It is trading inside a symmetrical triangle pattern
- Can XRP maintain its momentum and break out?
The XRP price increased significantly on Nov. 6, aligning with Donald Trump’s election win. Trump’s victory could be good news for XRP since he may fire Gary Gensler as head of the Securities and Exchange Commission.
Let’s analyze the XRP movement and see if the price can maintain its momentum and move toward its yearly high.
XRP Price Breaks Out
The daily time frame XRP chart shows that the price has been stuck in a range between $0.50 and $0.64 since July 15. During this time, there have been deviations above and below the range of highs and lows, but they were sustained.
Starting in October, the XRP price created a descending wedge, which is considered a bullish pattern. After bouncing at the wedge’s support trend line and the $0.50 horizontal area, XRP finally broke out on Nov. 6.
Despite the breakout, XRP failed to move above the middle of the range at $0.57. Rather, it created a long upper wick after a rejection (black icon).
Even though the price of XRP failed to clear the horizontal resistance area, technical indicators support the breakout. This is especially visible in the Moving Average Convergence/Divergence (MACD), which generated bullish divergence (green) and is moving above 50.
The Relative Strength Index (RSI) has also moved above 50, though it has not generated any bullish divergence.
So, despite the failure to clear $0.57 on the first attempt, the daily time frame suggests that the XRP price will do so soon and gradually increase to the range high.
What’s Next for XRP?
The daily time frame wave count suggests that XRP will initially move toward the range high and then break out.
According to the count, XRP is in wave B in an A-B-C structure (white). The sub-wave count is in black, showing a symmetrical triangle pattern.
If the count is accurate, XRP completes sub-wave D in an A-B-C-D-E triangle. This will likely take the XRP price to the range high and the triangle’s resistance trend line.
Afterward, giving wave C the same length as wave A leads to a high of $0.84.
However, since the triangle is not close to the conclusion and two more sub-waves are left, the XRP price may continue to consolidate before an eventual breakout.
More Consolidation Ahead
While the XRP price has broken out from a descending wedge, it still trades inside a horizontal range.
The wave count suggests that more consolidation is ahead before a long-term breakout.
The $0.64 area is likely to provide resistance.
