The Ripple XRP price has increased August 17 and created a higher low on September 11.
The price broke out from a descending resistance trendline but still trades below the $0.55 horizontal resistance area.
XRP Breaks Out After Long Lower Wick
The daily time frame technical analysis for XRP shows that the price created a very long lower wick on August 17 (green icon). The wick is considered a sign of buying pressure, suggesting that sellers could not push the price down further and buyers took over instead.
After creating a higher low on September 11, the XRP price broke out from the descending resistance trendline three days later. This led to a high of $0.55 on September 29.
The ensuing rejection (red icon) validated the $0.55 horizontal area as resistance.
Despite the rejection, XRP created a bullish, engulfing candlestick on October 2. This type of bullish candlestick negates the entire decrease from the previous period.
However, the candlestick still failed to cause a breakout above the $0.55 resistance area.
In the news, Ripple CEO Brad Garlinghouse announced that the company will not acquire Fortress Trust. This comes after a beach that compromised some of its customers.
In other news, Ripple Labs hired former U.S. white house staff member Lauren Belive as the new head of U.S. Public Policy and Government.
XRP Price Prediction: Will Breakout Above $0.55 Occur?
A closer look at the daily timeframe wave count and RSI gives a bullish outlook, supporting the possibility of a breakout.
Technical analysts employ the Elliott Wave theory as a means to identify recurring long-term price patterns and investor psychology, which helps them determine the direction of a trend.
The wave count indicates that the XRP movement since the August 17 bottom could be an A-B-C structure (black). This is characterized by the three-wave decrease in what is likely to be wave B.
Giving waves A:C a 1:1 ratio would lead to a high of $0.58, an increase of 11% measuring from the current price. If wave C extends to the 1.61 length of wave A, the price could increase by 25% and reach $0.66.
The daily RSI also supports the XRP price increase. Traders utilize the RSI as a momentum indicator to assess whether a market is overbought or oversold and to determine whether to accumulate or sell an asset.
If the RSI reading is above 50 and the trend is upward, bulls still have an advantage, but if the reading is below 50, the opposite is true.
The indicator is above 50 (green icon) and moving upwards, both signs of a bullish trend. Additionally, the breakout was preceded by a bullish divergence (green line).
This is a bullish development when a momentum increase accompanies a price decrease.
Despite this bullish XRP price prediction, another rejection from the $0.55 area will mean that the trend is not bullish.
In that case, a 20% decrease to the $0.41 support area will be likely.
For BeInCrypto’s latest crypto market analysis, click here.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.
Be the first to comment