XRP price must break a key resistance level before $1.00 becomes a real possibility.
While Bitcoin (BTC) is facing a potential new all-time high, other coins are showing strength as well. One of those coins is XRP, which has been going vertical in the previous weeks.
XRP’s price surged from $0.22 to a high of $0.78 during the month of November, which immediately ended up in a massive correction towards $0.45.
Let's take a look at the XRP price charts to determine whether this was an entry opportunity before the next leg up.
The crucial zone around $0.45 holds as support
The daily chart of XRP is showing clear support and resistance zones. Within such a heavy pump, the levels to watch can be derived from the daily timeframe.
In this case, the first massive support zone is around the $0.45 barrier. XRP corrected toward this zone as the price of Bitcoin dropped to $16,200 on Thanksgiving day.
The chart shows a clear support bounce as the price gained by more than 40% since.
If $0.45 failed to sustain support, the next support zone was around the $0.30 area, which is the previous resistance zone that was likely to be flipping support.
What are the new resistances if XRP rally continues?
The next resistance zone now to break is the $0.69 area, which is crucial before $1.00 can come into play.
There are a few useful tools to determine the potential resistance zones on the XRP chart. One of them is the Fibonacci extension tool.
The recent top is the "1" number on the Fibonacci extension tool and the bottom around $0.20 as the "0".
Therefore, the next likely resistance zone can be measured around the 1.618 Fibonacci level at $1.13. Similarly, the second zone is the zone around $1.70, which is the 2.618 Fibonacci level.
However, the first resistance zone between $1.08-1.18 is an important resistance zone, as it has also been acting as resistance throughout the 2017 cycle, as the chart shows. One can argue that a run toward $1.08-1.18 is likely once the area at $0.70 breaks.
The key level to watch for BTC/XRP
Once a price breaks above resistance, the next thing one would like to see is the previous resistance becoming support, if you're a bull that is.
The BTC/XRP chart is showing such a critical level (highlighted in green) that can flip to support. During the end of 2019 and the beginning of 2020, this area served as the range low and support for a substantial period.
However, it failed to sustain that support, leading to a drop to 0.00001500 thereafter.
With the recent breakout to 0.00004000 sats, the bulls will want to see a support/resistance flip of the 0.00002400 sats area. If that holds, XRP is likely to continue running towards the $1.00 barrier.
Lower timeframe levels to watch on the XRP chart
The XRP/USD chart is showing an apparent breakout above $0.65. As long as that area sustains support and confirms the breakout, continuation towards $0.74 is on the table.
However, failing to break the $0.65 area means that a drop toward $0.55 will become the likely scenario.
The higher timeframes give a clearer indication of where XRP is located in the market cycle. A multi-year downtrend was broken to the upside, meaning that dips will likely be considered as entry opportunities for traders.
With this in mind, if XRP holds $0.45 as support, continuation toward $1.00 is likely, particularly if Bitcoin price hits a new all-time high.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
from Cointelegraph.com News https://ift.tt/3fOKweR
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