Ripple (XRP) on Tuesday established a bullish setup after rising more than 10 percent against the US dollar.
The pair broke above the October peak to set a new one-month high at 0.569-fiat. It was previously stuck in a narrow trading range for multiple weeks amidst lower volatility. While the lack of bias-defining price action is itself not significant, the absence of solid bullish momentum, coupled with failed rally attempts of the recent weeks, confirms XRP’s overall downtrend. The latest rally marks the asset’s latest attempt to break above a strong resistance trendline.
However, nothing concrete is backing the XRP rally at this moment. The coin’s fundamentals have remained strong even in the times of bearish actions. The launch of xRapid, the presence of Bill Clinton and the financial market’s key players at Ripple’s Swell Conference, and many strategic partnerships are all favoring XRP’s rise in the long term. The company has also expanded its operations to the Middle East, with its Global Head Dilip Rao confirming that banks in the region would be using XRP to settle cross-border payments.
The volume indicators in the last 24 hours point to a massive traffic coming from Japanese and Korean markets. At the same time, tether is also contributing about 18% of the volume in XRP markets, hinting the influence of USDT traders on the altcoin.
The latest upside breaks in the XRP/USD chart now look to correct some of its action. Those who closed their long positions already could allow the rally to step back for a while before confirming an extended bullish momentum. That said, the pair could likely repeat the September 26 action, while targeting its low at 0.496-fiat as the potential support.
The corrective action is further confirmed by the RSI momentum indicator and the Stochastic Oscillator, both of which are inside their oversold areas and should attempt a pullback anytime.
To the upside, the XRP/USD pair is testing the falling upper trendline in red as a potential breakout threshold. The pair has previously failed to break above the said level, so its invalidation could fuel the bullish bias further. Any such upside action could put XRP traders’ long position towards 0.624-fiat.
A full-fledged assault on bears could be confirmed once the XRP/USD pair breaks above 0.93-fiat, the April high. Until then, sharp corrections on every near-term rally should not surprise traders.
Featured Image from Shutterstock. Charts from TradingView.
Last modified: March 4, 2021 3:07 PM