XRP Tests Support Level That Sparked 2018 Surge

What to Know:

• XRP is trading near $2.07, with analysts observing a potential 21-month EMA bounce similar to the 2017 pattern that preceded a major rally.
• The broader crypto market is experiencing mixed signals, with Bitcoin’s movements potentially influencing XRP’s direction.
• XRP’s ability to overcome resistance levels, especially around $2.26, is crucial for continued upward momentum and could impact liquidity.

Ripple’s XRP is once again in the spotlight as traders analyze a technical setup reminiscent of its 2017 market behavior. The focus is on its performance around a key support level that historically triggered a significant price surge.

XRP’s 21-Month EMA Support

In 2017, XRP broke out from a multi-year triangle pattern, sustained its position above the 21-month EMA, and subsequently experienced a substantial rally in early 2018. Currently, analysts have noted a similar pattern forming, with XRP breaking out from a large triangle and bouncing off the same 21-month EMA. This setup has sparked speculation that XRP could replicate its previous performance if the pattern holds. The current price action suggests a potential setup for another significant move.

Resistance Challenges

XRP recently surged from below $1.90 to $2.41 within a week, driven by increased ETF inflows and a reduction in token supply on exchanges. However, the rally has since lost steam, with the asset retracing to around $2.07. The 24-hour trading volume stands at $2.88 billion, with a slight price decrease in the last 24 hours and a nearly 3% drop over the past week. Key resistance levels lie ahead, with the Weekly 20 EMA and the mid-line of the Gaussian channel around $2.26 acting as immediate hurdles. Failure to overcome these levels could result in a return to multi-month support levels.

Potential Measured Move

XRP is also reacting to former triangle support, now testing it as resistance. According to analysts, XRP’s current structure mirrors its 2017 breakout, which saw the token exceed its measured move target. A similar breakout could potentially drive the token to a measured move target above $16.5, representing a substantial increase from current levels. This projection is based on technical structure alone and does not account for external market factors. The future trajectory of XRP depends on its ability to manage resistance and sustain upward pressure with sufficient trading volume.

Mixed Market Signals

Recent analysis indicates indecisive market behavior, with a move above the $2.10 resistance considered a bullish signal. The overall market direction may be influenced by Bitcoin’s movements. Cautionary signals include the potential formation of a gravestone doji, which could indicate market weakness. Whale activity, which saw a surge during the recent price increase, has since subsided, suggesting reduced participation from major holders.

ETF Influence and Market Structure

The potential approval and performance of XRP ETFs could significantly impact the token’s liquidity and market structure. Increased inflows into these ETFs could drive demand and potentially support higher price levels. Conversely, regulatory uncertainties or negative market sentiment could hinder the performance of these investment vehicles and dampen investor enthusiasm for XRP.

In conclusion, XRP’s current technical setup presents both opportunities and challenges. While the 21-month EMA bounce mirrors a historical pattern that led to substantial gains, the token faces significant resistance levels that must be overcome to sustain upward momentum. The broader market context, including Bitcoin’s movements and the potential impact of XRP ETFs, will also play a crucial role in determining its future performance.

Related: XRP Signals; Bitcoin, Ethereum Eye Key Levels

Source: Original article