XRP Price Tests 670-Day Support: Bounce or Breakdown in the Cards?
Will XRP Price Bounce or Break Down? | Credit: Veronica Cestari
Key Takeaways
- The XRP price has bounced nearly 20% since reaching a bottom on April 13.
- XRP has traded above an ascending support trend line since May 2022.
- Can the price bounce at this support, or will a breakdown happen instead?
XRP has not performed well in 2024, falling nearly 20%. Going back to 2023, when most of the cryptocurrency market increased several folds, XRP only increased by 86%. This highlights a trend in which XRP has lacked volatility in both directions.
The ongoing market correction took the price back to a 670-day ascending support trend line. Can the XRP price bounce at this long-term support level and start an upward movement, or will the price continue consolidating and possibly break down from the long-term support?
XRP Bounces at Long-Term Support
The weekly time frame technical analysis shows the XRP price has increased alongside an ascending support trend line since June 2022. The trend line has been validated six times (green icons), most recently last week. Since then, the XRP price has bounced nearly 20%.
Despite the bounce, XRP still trades below the main horizontal resistance area of $0.55. The area is critical since it has intermittently acted as both support and resistance since the start of 2022.
The weekly RSI and MACD are both leaning bearish. While trending downward, the RSI fell below 50 and the MACD crossed into negative territory. Due to the mixed outlook from the price action and indicators, a look at a lower time frame is needed to determine the future trend’s direction.
XRP Price Prediction: What’s the Next Move?
The daily time frame chart shows that XRP has traded inside a descending parallel channel since August 2023. These channels usually hold corrective movements. On April 13, the price fell below the channel’s support trend line, but bounced, creating a long lower wick and reclaiming it.
The movement is eerily similar to that of August 2023, when a similar bounce and lower wick marked the start of the corrective channel.
Interestingly, the RSI fell into oversold territory (green circles) on both occasions. This started an upward movement toward the channel’s resistance trend line.
If a similar movement transpires, the XRP price will begin an increase toward the resistance trend line at $0.73, increasing by 45%. A bullish cross in the MACD will confirm this possibility. In August 2023, it happened 11 days after the XRP price bounce.
Conversely, closing below the channel’s support trend line will invalidate this positive outlook and could cause a near 30% drop to the $0.35 support.
XRP’s Next Move Will be Critical for the Future Trend
The XRP price trades close to the support trend line of a long- and a short-term pattern. While there is the possibility that XRP will replicate a bullish fractal from 2023, the trend is not confirmed yet. Rather, the reaction to the support trend line will be critical in determining if the future trend is bullish or bearish.
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