XRP Price Drops 10% but Fractal Formation Hints at 50% Increase Ahead
Can the XRP Price Complete Bullish Fractal? | Credit: Hameem Sarwar
Key Takeaways
- The XRP price is creating the final portion of a fractal that led to upward movement in August 2023.
- The fractal depends on a bullish divergence in the RSI and a retest of the long-term parallel channel.
- Can XRP begin a similar price increase toward resistance, or will the price break down instead?
The XRP price has traded inside a parallel channel for over 250 days. It currently trades very close to its support trend line. Previously, it bounced at this trend line on April 13, starting the ongoing upward movement.
A very similar move occurred in August 2023, in which XRP returned to the support trend line before increasing over 50%. Can the same thing happen again?
What is XRP’s Fractal?
The XRP price has trades inside a parallel channel since August 2023. During this time, it has validated both the support and resistance trend lines of the pattern several times.
More recently, it bounced at the channel’s support trend line on April 13 (green icon). Even though the price was rejected on April 22, falling 10%, the decrease is in line with a previous fractal that led to a 60% upward movement.
In August 2023, XRP bounced at the channel’s support trend line (white) and started an upward movement. Shortly afterward, the daily MACD made a bullish cross (white line). Then, XRP returned to the channel’s support trend line, completing a bullish divergence in both the RSI & MACD (green). This led to a 57% increase to the channel’s resistance trend line.
The current XRP price movement is nearly the same. Shortly after the bounce and rejection, the MACD made a bullish cross. If the XRP price returns to the support trend line, the RSI & MACD will likely confirm bullish divergences.
If a similar upward movement follows, the channel’s resistance trend line will mark a 55% increase.
Long-Term XRP Price Trend Uncertain
The weekly time frame shows the XRP price has increased alongside an ascending support trend line since June. So, the trend line has existed for 670 days. More recently, the it was validated in April, creating a long lower wick (green icon).
Despite the bounce, XRP did not clear the $0.52 resistance area. Rather, it created a long upper wick and could close the week below it if it does not increase.
If the proposed fractal plays out, XRP will reach the $0.70 resistance area. Then, it could create a trading range between $0.52 and $0.70, moving away from its long-term ascending support trend line.
However, the weekly RSI and MACD do not aid in determining the future trend’s direction. The RSI just fell below 50 and the MACD is at 0, both signs of an undetermined trend.
So, the weekly time frame for XRP does not corroborate the creation of a fractal, though it does not invalidate it either.
Different Time Frames Give Mixed Readings
While the daily time frame suggests the price could complete a bullish fractal soon, the weekly one does not confirm this possibility. rather, it shows an undetermined trend. So, the price has to bounce at the trend line and confirm the divergences in order for the fractal to play out. Whether the XRP price closes the week above $0.52 will also be critical for the trend.
