XRP could revisit $0.25 amid Bitcoin’s rising correlation and falling dominance
Since XRP’s brief tryst with the $0.25 level on January 18, the cryptocurrency saw a steady decline over the following week to under $0.21. However, XRP has risen in value since then to around $0.232 at the time of writing, and the coin’s aspirations of meeting the $0.25 level again may be finally within reach. According to CoinMarketCap, XRP has a market capitalization of over $10.1 billion.
XRP 4-hour chart
Over the last week or so, XRP has been moving through a symmetrical triangle formation on the 4-hour chart, with a declining volume trend alongside it. Since these patterns exhibit bullish breakouts 60% of the time, XRP is likely in for some gains over the course of the next week. Breakouts usually occur around 72% of the way to the triangle’s apex, implying a pattern breach could occur in the next 24 hours.
The 50-moving average was seen under the price line, which is a typically bullish sign on short-term charts. The EMA ribbon lines were also moving under the price candles, and the lines look to have converged through a mean reversion. Such convergence is usually followed by a broadening of the space between the ribbon lines and could lead to a powerful breakout from the pattern.
MACD also looked optimistic in terms of a short-term price pump. The blue line maintained its bullish crossover from two days ago, with MACD displaying a rising bullish momentum since then.
Bitcoin’s Dominance and Correlation with XRP
Bitcoin dominance dipped by around 3.35% soon after the second week of January, and has since seen lowering levels of dominance. This could suggest that investors are diversifying their assets into other altcoins, which might benefit XRP over the coming days and weeks.
Further, CoinMetrics data on shows XRP’s 90-day correlation with Bitcoin is at its highest point since April last year. Considering Bitcoin‘s recent jump to the $9000 level, XRP might follow in the king coin’s footsteps.
Considering how the 50-MA and EMA ribbons are moving under the price candles, as well as the rising BTC correlation amid declining Bitcoin dominance, XRP is likely to breakout above the symmetrical triangle formation sometime in the next two days. This could push the coin to the 50% Fibonacci retracement line at around $0.258 by the first week of February, causing an 11.2% rise in value.