Technical Analysis and Market Entry: XRP – Daily Closure Above $0.4000 is Vital for Mass Gains

  • XRP rockets higher on Tuesday, gaining well over 20% in the early part of the session.
  • XRP/USD must firmly breakdown the barrier of $0.3800-$0.4000 for more significant upside momentum.

XRP Price Surge

The XRP price erupted early on Tuesday, as a big bull wave came into play, seeing a jump of over 20% through the early part of the day. XRP/USD jumped to its highest levels since 19th January, around the 2019 peak area, before losing steam.

Price action had once again been ranging since mid-April after what was initially a promising start to the month. Back on 2nd April, the bulls kick-started a decent recovery, rallying as much as 21% up to a high at the time of $0.3830 on 5th April.

The bulls very quickly lost momentum, after running into a big area of supply. There is a significant barrier in the way of the big psychological $0.4000 that has proven to be a nuisance for the bulls on several occasions.

Sellers are camped from the $0.3800-$0.4000 range, which has not allowed the bulls through. There was a freak and very brief spike above this on 23rd December 2018; however, it was just a long wick that moved above and retraced. XRP/USD at the time jumped as high as $0.4680.

Range Breakout

XRP/USD daily chart.

The 2019 range has remained within $0.4000 to the upside and $0.2800 down below. For a large portion of the year, the price has narrowed extremely within the range of $0.2800-$0.3400. The most recent breakout came after a near-term triangular structure breach following a period of consolidation. A similar formation and bull move higher was observed at the start of April.

Throughout 2019 so far, there has been an issue of the bulls failing to sustain upside momentum. Bears consistently have proven to sell any decent rallies that materialize, which has seen XRP/USD forced back into its mundane range for the year. There needs to be a strong push and price stabilization above the $0.4000 to produce a new bottom to then capitalize.

Trade Recommendation

A buy would be on the cards once the price can demonstrate the latter move noted above. XRP/USD needs to prove that $0.4000 can been conquered, then build upon that. This is similar to what was seen with Bitcoin and the $5,000 price territory this year. Upon a firm daily closure and the price settling north of the $0.3800-$0.4000 range, then a long position would be attractive.

Should XRP produce the necessary comfort at $0.4000, then the next target area of interest will be $0.4500. The price was seen just above these heights for an extremely short period on 23rd December.  Further north, if the momentum remains with the bulls, then a quick move back above $0.5000 will be eyed. A supply area tracks from $0.5200-$0.5400, where the price was last seen on 19th November 2018.

XRP/USD weekly chart.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

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Ken has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.