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XRP Fractal Develops According to Plan – 35% Price Increase Ahead?

Last Updated May 7, 2024 12:03 PM
Valdrin Tahiri
Last Updated May 7, 2024 12:03 PM
By Valdrin Tahiri
Verified by Peter Henn

Key Takeaways

  • The XRP price has started a fractal that led to a notable upward movement in August 2023.
  • While there is no bullish divergence in the RSI, XRP retested the long-term parallel channel.
  • Will the increase toward resistance continue in a similar fashion, or will the fractal invalidate?

The XRP price created a double bottom pattern at the support trend line of a long-term ascending parallel channel. This was the first step in recreating a fractal that led to a 50% upward movement in August 2021.

Even though the movements are nearly identical until now, XRP still trades below the channel’s midline. Can the price reclaim it and complete the final portion of its fractal?

XRP Bounces – Moving Closer to Fractal Completion

After bouncing and creating a long lower wick on April 13, XRP validated the long-term channel’s support trend line. Then, it returned to the trend line on May 1, creating a higher low. It has increased since, culminating with a high of $0.57 on May 6.

While the movement is nearly identical to that of August 2023, there is one main difference; While both movements created higher lows, only the 2023 one generated a bullish divergence in the RSI and MACD (green).

This is because the daily close on the second bounce was lower in 2023. In the 2024 movement, the price created a long lower wick in its higher low, leading to a higher daily close.

XRP Fractal
XRP/USDT Daily Chart | Credit: TradingView

So, both the price action and indicators have created higher lows, meaning that a bullish divergence has not been formed.

Nevertheless, the rest of the movement has gone according to plan. If the XRP price moves above the middle of the channel, it can increase to the resistance trend line, completing the aforementioned fractal.

Measuring from the current price, this would be an increase of another 35%.

XRP Price Drops 10% but Fractal Formation Hints at 50% Increase Ahead

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.

XRP Channel Price Movement
XRP/USDT Daily Chart | Credit: TradingView

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 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.

XRP Price Long-Term Bounce
XRP/USD Weekly Chart | Credit: TradingView

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.

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