XRP Reclaims Important Horizontal Level; Possible Breakout?

On Feb. 28, Ripple (XRP) bounced above the $0.75 horizontal area, successfully validating it as support.

XRP has been decreasing inside a descending parallel channel since Sept. 6. Such channels are considered corrective patterns, meaning that a breakout from it would be the most likely scenario.

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So far, the downward movement has led to a low of $0.55 on Jan. 22. This validated the support line of the channel. 

Afterwards, the price initiated an upward movement and reclaimed the $0.70 horizontal area. It returned to validate it as support on Feb. 28 before bouncing once more. 

If a breakout from the channel occurs, the next resistance area would be at $1.35.

Will XRP break out?

Technical indicators in the daily time-frame are mixed, though they are leaning on bullish. 

The reason for this is that both the RSI and MACD are moving upwards. However, the RSI is barely above 50 and the MACD is still at the 0 line. Movements above these levels are required in order for the XRP trend to decisively be considered bullish.

The six hour chart, however, is more clearly bullish. 

It shows that XRP has broken out from a descending resistance line after the fourth attempt (red icons). Currently, it seems to be in the process of validating the line as support.

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This reading supports the possibility that XRP will increase towards the resistance line of the channel and potentially break out.

Wave count analysis

Cryptocurrency trader @CryptoTony_ tweeted a chart of XRP, stating that a correction is complete and new highs will follow.

The decrease measuring from Feb. 9 does seem to be an A-B-C corrective structure. However, it isn’t clear what the preceding upward movement (highlighted) is. 

In any case, if the ongoing increase has the same length as the initial one, which is common, XRP would reach a high of $1. This would take it to the resistance line of the long-term channel.

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.

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