- Summary:
- The Ripple price is hemmed in by strong support below and robust trend line resistance above and something's got to give, but which way will XRP break?
The Ripple price is hemmed in by strong support below and robust trend line resistance above, and something’s got to give, but which way will XRP break? After a 168% rally, it was inevitable that Ripple would hit the ceiling at some stage. However, that ceiling has capped the price for the last 12 days, suggesting that XRP is reversing. Although, so far, the price is finding support at $1.1000. But inevitably, the Ripple price will forge a path either higher or lower, and it could be explosive when it does.
After almost breaking down below $0.5000 in July, Ripple (XRP/USD) has been on a tear. Between the 21st of July and the 15th of August, XRP climbed 168% to $1.3590. Although the price is now rolling over, and despite attempts to punch through, Ripple is faltering at increasing lower levels. This has resulted in a significant trend line emerging above the price. And whether XRP/USD can clear it is debatable at the moment.
XRP/USD Technical Analysis
The daily chart paints a fairly mixed picture for the Ripple price. Firstly, we see the trend resistance from April’s high currently sits at $1.3000. This is a considerable obstacle to the path higher. However, if XRP convincingly breaks through it, should extend north to May’s high at $1.8170. Although, there are some signs the rally is running out of steam.
Considering the recent performance, the lack of trading volume is concerning. Previous moves of this magnitude have been accompanied by heavy buying, and we do not see that in this rally. Furthermore, following this months’ high, the volume has been trending lower. Additionally, the Relative Strength Index is also declining and working off the prior overbought reading. However, it’s current 59.91 will need to fall further to look attractive.
This could lead the Ripple price to another test of support at $1.1000. After the epic meltdown in mid-May, XRP bounced from $0.6200 to $1.0990 before dropping 30%. Again, a week later, the rally was foiled at $1.1050, before the price found its way to $0.5100. Furthermore, on the run-up earlier this month, $1.1000 proved a sticking point before XRP eventually broke through on its way to $1.3950.
On that basis, a close below $1.1000 may well force the price materially lower. An over-extension on the downside could take XRP as low as the 200-day moving average at $0.8080. And if that fails, the outlook becomes very bearish indeed.
Although, which theme plays out will depend on progress at the top of the crypto leader board. This morning, Bitcoin (BTC/USD) is currently losing ground below $50,000, exerting downside pressure on the complex as a whole. However, should BTC/USD reclaim the $50k threshold, it will likely spur buying across the board. Therefore, XRP traders should follow developments in Bitcoin as this could dictate which trend line buckles.
Ripple Price Chart (Daily)
For more market insights, follow Elliott on Twitter.