XRP’s ongoing upside retracement risks exhaustion as its price tests a resistance level with a history of triggering a 65% price crash.
XRP price rebounds 30%
XRP’s price gained nearly 30%, rising to $0.36 on June 24, four days after rebounding from $0.28, its lowest level since January 2021.
The token’s retracement rally could extend to $0.41 next, according to its „cup-and-handle“ pattern shown in the chart below.
Interestingly, the indicator’s profit target is the same as XRP’s 50-day exponential moving average (50-day EMA; the red wave).
Major resistance hurdle
The cup-and-handle bullish reversal setup tends to meet its profit target at a 61% success rate, according to veteran analyst Thomas Bulkowski.
But it appears XRP’s case falls in the 39% failure spectrum because of a conflicting technical signal presented by its 200-4H exponential moving average (EMA).
XRP’s 200-4H EMA (the blue wave in the chart below) has previously served as a strong distribution signal. Notably, in April 2022, the token attempted to break above the said wave resistance multiple times, only to face rejections on each try; it fell 65% to $0.28 later.
The ongoing cup-and-handle breakout has stalled midway after XRP retested the 200-4H EMA as resistance on June 23. Now, the token awaits further bias confirmation while risking a price decline similar to what transpired after April.
XRP’s overbought relative strength index (RSI), now above 70, also raises the possibility of an interim price correction.
XRP LTF breakdown underway
The downside scenario on XRP’s shorter-timeframe chart comes in line with giant bearish setups on its longer-timeframe chart.
As Cointelegraph covered earlier, XRP has entered a breakdown stage after exiting its „descending triangle“ structure in early May.
As a rule of technical analysis, its triangle breakdown should have it fall by as much as the structure’s maximum height, which puts its downside target near $1.86.
In other words, another 50% price drop for XRP could happen by the end of July this year.
50,000,000 #XRP (16,249,045 USD) transferred from Ripple to unknown wallethttps://t.co/FalGAzxNxg
— Whale Alert (@whale_alert) June 23, 2022
Macro risks led by the Federal Reserve’s hawkish policy further strengthen XRP’s bearish bias. The XRP/USD pair has typically traded lower in tandem with riskier assets in 2022, with a correlation coefficient with the Nasdaq Composite sitting at 0.90 as of June 24.
A score of 1 means that the two assets moves in perfect sync.
Related: Almost $100M exits US crypto funds in anticipation of hawkish monetary policy
Conversely, anticipations that Ripple would win the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) for „allegedly“ selling unregistered securities could negate the bearish setups.
I’ve stated for over a year that many @Ripple and #XRP supporters underestimate the negative impact the SEC lawsuit has had. B/c Ripple has done well outside the U.S. and is hiring, etc., people say otherwise. But XRP must be deemed a non-security in the US to fulfill its promise https://t.co/oBmiTQOWfJ
— John E Deaton (203K Followers Beware Imposters) (@JohnEDeaton1) June 22, 2022
That being said, XRP could rebound toward $0.91 by the end of this year if the ongoing retracement continues any further. Interestingly, the token has bounced after testing long-term ascending trendline support, as shown below.
The bounce has also followed XRP’s weekly relative strength index (RSI) decline below 30 — an oversold threshold, which signals a potential buying opportunity.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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The recent XRP bull market has stalled near a key resistance level that previously triggered a 65% collapse. Cryptocurrency traders have been watching this level closely and are now cautiously waiting to see what the future brings.
The surge in XRP prices began on April 5th and initially had great success, with prices almost tripling in a matter of days. The current bull market managed to reach a high of $1.20 at one point, narrowly skimming the key resistance level of $1.22. This price level served as a major support point in February before prices dramatically crashed 65%.
Technical analysis is now suggesting that prices should oscillate in the mid $1 range if the current rally is to continue. This should present a safer environment for traders, as the perilous resistance level of $1.22 is no longer a threat to their trades. While some analysts anticipate an eventual break of this level, failure to do so may trigger further losses for XRP holders.
On the fundamental side, Ripple is moving ahead with its plans to become the leading decentralized payments platform. In an effort to do so, the company recently closed an acre of land in Texas in order to build a new state-of-the-art facility dedicated to blockchain and cryptocurrency projects. The move will see Ripple secure additional jobs as well as well-paying salaries, likely generating further interest and confidence in XRP.
Historical data is also playing a key role in influencing market sentiment. In early 2018, XRP rallied to near $3 in record time, only to crash and eventually bottom out at $0.23. This brutal bear market has left traders cautious, with many panicking whenever XRP prices threaten to reach new highs.
At the time of writing, it appears that the XRP rally has stalled near key resistance level of $1.22. Cryptocurrency traders and analysts will now be closely monitoring price movements over the coming week to see where prices will head next. A break of this level could easily trigger further gains, or a selloff that will see prices plunge lower.
