While some altcoins have shown remarkable strength in recent weeks, others have lagged behind. One of these coins is XRP – Ripple's token is still hovering around key support levels and hasn't shown any significant upward pressure lately.
What exactly is holding XRP in the downtrend line? Let's find out through the chart (chart) below.
XRP / BTC faces a 2-year downtrend
The chart of XRP / BTC pair shows that this digital asset is currently trying to break through an important downtrend line. Later, many altcoins have escaped the downtrend and some examples such as Ethereum Classic (ETC), Cardano (ADA) and most recently ICON (ICX).
Ripple seems to have lagged behind, but there could also be a major move.
The 4-hour chart is clearly showing a breakout of a 2-month downtrend. This breakout was re-tested at 0.00002660 satoshi a few days ago. Right now, XRP is facing the next major hurdle in the red zone at around 0.00002950 to 0.00003000 satoshi.
If this barrier is broken, it seems that XRP / BTC will take off to the next resistance and may stimulate more investors to join the buying side of this coin. The next target is seen in the area of 0.00003750 satoshi.
Is XRP ready for a 180% move?
When looking at the daily XRP / BTC chart, we can see that there is quite a lot of potential for price appreciation.
The last time XRP broke such a strong downtrend, prices soared 180%. A similar breakout and move will bring the price to the target of 0.00006600 satoshi. It would not be surprising if such a move occurred, as XRP usually makes a quick leap in a few days without any pullback.
As can be seen in the chart above, the previous breakout in September 2018 led to a 180% increase, after which the price began to stabilize and not reach any higher levels.
What signals do we need to assess next to show that the XRP / USD pair is signaling?
XRP / USD breaks the 2-year downtrend
The XRP / USD pair is outperforming the XRP / BTC pair, as the pair has broken the 2-year downtrend. However, does this prove for a bullish at this point? Not much. Despite some recent developments, XRP / USD still has a major obstacle to address before the rally can actually begin.
First, XRP / USD needs to break out of the $ 0.3 resistance level (the red horizontal rectangle). This level has been a support for quite a long time in 2018 and 2019, and now XRP needs to overcome it. If XRP can surpass this level, a new rally is likely to push the token to around $ 0.55.
XRP now looks exactly like January 2016
There are many similarities between XRP's price action today and the XRP market structure in early 2016. The similarities are shown in the XRP chart. The price of XRP has fallen below the support level in 2015. This breakdown has resulted in an important thrust of 200% and the breakout of a downtrend.
After that, the price stabilized in a sideways range before the start of the huge price increase race at the end of 2017.
A similar action has occurred in recent months on XRP. A breakdown of the major support of $ 0.3 has pushed the token down to the next support of $ 0.17. It is worth noting that a similar downtrend is being tested right now. In addition, XRP is also trying to return to the range.
If a similar move occurs, a rally to $ 0.55 is expected, and is likely to occur after XRP surpasses $ 0.3.
Is this an unrealistic expectation? Absolutely not, as we have noticed similar moves from other cryptocurrencies over the past week. A breakout of such a downtrend often leads to big volatility and a strong trend reversal.
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Disclaimer: This article is an analysis by cryptocurrency analyst Michaël van de Poppe – a regular contributor to CoinTelegraph. Readers should only consult, not consider this as an investment advice, especially from Toiyeubitcoin, we will not be responsible for your investment.
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According to CoinTelegraph
Translated by ToiYeuBitcoin