August 16, 2022


Disclaimer: The results of the following analysis are the author’s opinions only and should not be considered investment advice.

XRP noticed a range-bound transient fluctuation in the $0.307-$0.367 region that lasted nearly seven weeks. However, the gradual increase in buying pressure in the altcoin led to an upward reversal of the $0.36 support level. This growth necessitated a bullish channel on the daily time frame.

Meanwhile, buyers have not yet found a convincing close outside the supply area (green, rectangle) to establish a strong bullish story. A close above this level can help buyers continue their spree.

At the time of writing, XRP is trading at $0.3775, up 1.96% over the past 24 hours.

XRP daily chart

Source: TradingView, XRP / USDT

The alternative tested the multi-year support range of $0.307-$0.309 several times over the past month. But buyers held onto their land to lay a foundation for impressive growth over a period of three weeks.

While the supply zone restricted purchasing power, the altcoin posted a recovery above the 20 EMA (red) and the 50 EMA (cyan). Push the current channel path to test this viewing area multiple times. Bulls may exploit weaknesses in this area, especially with a bullish flag finding support near the exponential moving averages.

The rebound from the $0.36 support level put XRP to test the $0.408 area. A close outside the supply zone could result in a buying advantage in the near term. To add it higher, bullish pennant settings are generally more effective in the direction of decreasing volume. In the case of XRP, volumes were in a downtrend during the setup of the flag.

Logic

Source: TradingView, XRP / USDT

A comfortable position for the Relative Strength Index (RSI) above the support level of 54 could be in favor of the buyers in the upcoming sessions.

Also, Chaikin Money Flow (CMF) has identified lower tops to portray a somewhat bullish divergence with the price. Its immediate trendline support may reignite a rally in buying volumes. Moreover, the MACD lines maintained their bullish stance while oscillating above the zero mark.

conclusion

Considering XRP’s bullish reversal at the $0.36 support combined with a bullish flag setup and CMF divergence, buyers will aim to continue the gradual growth on the charts.

The inability of buyers to create a bullish crossover on the 20/50 EMA may extend the pressure phase before a choppy breakout occurs. Either way, the goals will remain as discussed.

Also, it is important to keep an eye on the Bitcoin movement and broader sentiment to identify opportunities for bullish reversal.



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