Ripple (XRP) has broken through the 700-day resistance line to hit a yearly high of $0.94. However, the price has since declined, confirming the significance of the $0.90 resistance area.
With the successful breakout, the long-term trend for Ripple remains bullish. Although the short-term trend is not yet clear, it can be assumed that XRP will bottom out soon, if not already.
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Ripple declines after bouncing off resistance
As the results of the technical analysis of the weekly chart show, the picture for the Ripple project token looks optimistic. This is mainly due to the breakout of the descending resistance line that was present on the 700-day chart. Breakouts of such long-term patterns often result in significant price movements.
The news on Ripple also remains positive. The massive international adoption of the project has intensified after Ripple’s historic victory over the US Securities and Exchange Commission (SEC) after a long legal battle over whether XRP is a security.
See also: Ripple explained the victory over the SEC
After the bullish breakout, XRP successfully broke the horizontal resistance zone at $0.54, forming a bullish candle. The token then reached the next resistance level at $0.90, but bounced off it within the same week (red icon).
XRP is currently trading very close to the midpoint between these two levels.
Source: TradingView
The weekly relative strength index (RSI) further confirms the likelihood of continued growth. This momentum indicator is above the 50 mark and rising, indicating a bullish trend and suggesting that the bulls still hold the upper hand in the market.
XRP Forecast: Has the Correction Ended?
Meanwhile, the wave analysis of the shorter daily time frame also reflects a positive picture for Ripple.
According to the most likely wave scenario, the price is now in the fourth wave of a five-wave bullish structure (white color). This suggests that after the completion of the correction phase, the growth rate is expected to accelerate towards the target level of $1.10. This is the 1.61 Wave 4 outer correction level and is 66% away from the current price.
If the bottom has not yet been reached, then the most likely area for it is the $0.64 area, which is formed by the confluence of the 0.618 Fibonacci support level and the previous ascending parallel channel.
A strong rebound from this level will confirm the beginning of the fifth wave. The price has already almost reached it, so a rebound will confirm the formation of the bottom.
Source: TradingView
Despite the bullish outlook for Ripple, a drop in XRP below the first wave high at $0.56 (red line) would indicate a bearish trend. In such a scenario, the price is likely to drop to the channel support line, which is currently at $0.50. This would mean a 25% drop.
Read also: Ripple (XRP) forecast for August 2023: expert opinions
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2023-08-05 16:44:00
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