Such as Bitcoin (BTC) has been in the spotlight in recent months, the altcoin XRP (XRP) does quite well on its own. Bitcoin’s rally has been linked with institutions and Wall Street jumping on this new asset class and digital store of value. Meanwhile, XRP has come out of a multi-year downward trend to gain momentum as well.
However, XRP price has not yet been able to break the $ 1 barrier, despite the Flare Network airdrop now just around the corner scheduled for December 12th.
Is this recent move a classic example of “buy the rumor, sell the news” or should more upward be expected? Let’s take a look at the graphs.
XRP makes its first higher high since January 2018
XRP / USD has shown some impressive numbers in recent weeks as the token rose from $ 0.22 to a peak of $ 0.80. This is classic XRP price action as the rallies are vertical and volatile rather than organic and gradual. The recent move is no exception as the price rises in a few days.
However, the recent move broke through a multi-year downward trend, as the graph shows. This downward trend was broken and established a new higher high. In fact, this is the first all-time high since the bear market started in January 2018.
Additionally, a smaller rally took place in August, pushing the price of XRP from $ 0.16 to $ 0.33. Following that move, the price of XRP corrected towards its previous resistance area at USD 0.22. This correction marked a bullish support / resistance flip after which the massive move towards USD 0.80 took place, up to $ 0.90 on Coinbase last mo.
After such a move, a correction seems imminent
XRP’s price action often provides a signal ahead of such vertical price movements, after which a more extensive correction begins. The chart above shows four previous movements of XRP, which are similar to the previous one.
Such large vertical movements usually occur after a long correction that can take weeks to months and paves the way for the next impulse movement.
This is not a bad outcome, as impulse movements often require such corrections before more upward movement occurs. Often times, these impulsive moves correct to the previous resistance area to set up a bullish support / resistance flip.
Levels to keep an eye on with XRP
The daily time frame indicates some nice levels to watch for XRP traders or investors. These levels are based on historical price action as both crucial zones just happen to be previous areas of resistance.
The first costs about $ 0.45, which has already been tested in recent weeks. As Bitcoin corrected to USD 16,200, XRP / USD fell sharply to USD 0.45, resulting in a turnaround in support / resistance.
This confirms the huge correlation between cryptocurrencies at the moment. Altcoins can regain bullish momentum as long as Bitcoin remains stable. However, once Bitcoin starts to correct, altcoins will suffer and often see heavier losses than Bitcoin.
So when Bitcoin starts to make a heavier correction In the coming period, the second crucial area for investors to watch out for is the USD 0.32 area. This level served as the resistance zone for over a year, making a support / resistance flip here extremely bullish.
Both zones just happen to be a very positive thing for XRP, although admittedly they are very painful for investors who bought over $ 0.70. So if XRP price consolidates above USD 0.45 or USD 0.32, it will establish another higher low for the markets.
This chart provides a simple overview of the structure of the market, and shows that the recent pump made its first highest peak after a multi-year bear market since early 2018.
After a higher high, a higher low must be set to continue the uptrend. If one of the two zones becomes a new support zone, the price of XRP is ready to set a new higher high in the next impulse move. This higher high will then open the door for the price of XRP to reach $ 1.00 and possibly even $ 1.50 in the coming months.
The views and opinions expressed here are solely those of the author and do not necessarily reflect Cointelegraph’s opinion. Every investment and trade move carries risks. You should do your own research when making a decision.