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XRP broke out of its falling wedge pattern, but it has yet to break through the swing high of $1.30. A retracement over the next 24 hours would form a symmetrical triangle, from which $1.60 can be gained.
Furthermore, the mood is expected to be upbeat following Ripple’s recent legal triumph over the SEC. At the time of writing, XRP was trading at $1.27 and was ranked sixth on CoinMarketCap.
XRP Daily Chart
Despite the fact that XRP broke above the top trendline of a bullish pattern, low volumes raised concerns. If an asset breaks out of a low volume pattern, the chances of a throwback are extremely high. Similarly, in the case of XRP, a southward move and a closure below the 20-SMA (red) would allow sellers to extend short-term losses below $1.12. This would result in the development of a symmetrical triangle. If the breakout is effective, $1.60 will be in the crosshairs.
XRP would need to close over $1.30 to nullify this scenario. This would be a continuation of a previous breakout, with targets set somewhat higher than $1.40. Conversely, a deep retracement and close below $1.05 would severely dislodge XRP’s bullish structure.
The RSI readied for another run towards the upper area after stabilising from overbought levels only last week. This was accompanied by a buildup of momentum on the Awesome Oscillator.
The +DI of the Directional Movement Index traded above the -DI, indicating that XRP’s bullish trend was not in risk of reversing. If the RSI and AO continue to rise, the prospects of a pullback towards $1.12 are slim.
On the back of a descending wedge pattern, XRP can set its sights on $1.40 right away. A reversal and fresher low around $1.120, on the other hand, would allow XRP to take shape within a symmetrical triangle – a pattern with greater breakout potential.
If the market continues to behave in this manner, a 40% increase towards $1.60 can be expected during the next few weeks.