XRP, the third-largest cryptocurrency, was trading at $0.185. Despite maintaining a significant upward price action after a devastating loss on 12th March, the coin has so far failed to post substantial momentum necessary to vault past crucial resistances. In addition, bearishness continued to linger as chances for an upward breakout appeared bleak.
XRP Hourly Chart:
Source: XRP/USD on TradingView
XRP price candles appeared to maintain an uptrend since the crash. However, the formation of the ascending channel pattern in the hourly chart indicated an eventual bearish breakout. At the time of writing, the price was found to be close to a breakout.
The movement of the daily moving averages has been interesting this year. At the beginning of 2020, 50 DMA [Pink] was above the 100 DMA [Purple]. This, however, changed as the cryptocurrency market took a massive plunge after the crash on 12th March. While this flip did not happen precisely at that time, the subsequent price drop to 2020 lows along with high sell-off prompted the moving averages to come closer as the 50 DMA slid below the 100 DMA on 31st March. The gauge has since expanded and there is no sign of convergence despite price moving upward.
RSI, however, indicated that there is a high buying pressure in the market as it was well above the 50-median neutral band. This indicated a positive sentiment among the XRP investors in the market.
Scenario 1:
100 DMA has severely resisted the XRP price candles since its bearish crossover with the 50 DMA. If the bearish trend takes shape, which is supported by the ascending channel pattern as well as the daily moving averages, XRP could retrace its steps all the way back to its support point at $0.177. If the bearish trend gains further momentum, the coin could roll back to $0.171 support level.
Scenario 2:
In a highly unlikely scenario of a bullish breakout, the coin could find resistance at point $0.198.
Correlation:
Source: CoinMetrics
XRP has closely followed BTC’s price action. And despite drops in correlation with BTC during the latter part of 2019, the figures jumped up as the crypto market was rallying in the first part of 2020. The BTC-XRP correlation coefficient currently stood at 0.81. A much-needed bullish revival for XRP could, in fact, be prompted by a strong Bitcoin rally.
Conclusion:
If the bearish breakout materializes, XRP’s retracement to $0.177 and $0.171 levels. In case of a trend reversal, however, the coin’s resistance point stood at $0.198.
