Technical Analysis and Market Entry: XRP/USD Heading for Critical Trend-Defining Retest of Breached Triangular Formation
- XRP is back under pressure following the 25% two-day surge into $0.3000, which proved to be unsustainable.
- XRP/USD price action is heading for a critical retest of a breached narrowing triangular structure.
XRP/USD: Recent Price Behavior
Ripple’s XRP staged a large rebound throughout Tuesday and Wednesday, but failed to further capitalize with follow-through on Thursday at the time of writing. XRP/USD jumped some 25% over the two days, hitting the highest level seen for six weeks. The bulls pushed the price into the significant psychological $0.3000 territory, which proved once again to be unsustainable.
Sellers have moved in quickly to pile the pressure on XRP, seen down some 7% on Thursday. The price action has been very non-committal, as the price has been narrowing within a triangular structure formation. It was perceived to be a bearish pennant pattern, which was subject to a breakout south. However, bulls managed to defy the odds of the setup, forcing a breach and daily closure above.
Retest or Failure?
As detailed above, the price escaped the confinements of a bearish pennant, which had invited a strong wave of buying pressure. The loss of upside momentum is forcing the price to head down for a retest. In terms of the upper acting trend line of the pattern, that will be sought at as potential support, tracking at $0.2530. Should the retest hold via the daily, this could prove to be encouraging for another attempt at a move north. It would complete a technical pattern of behavior of breaking out and retesting, making way for a continued bull run.
Should the noted retest fail to hold, then a strong invite of selling pressure could likely be seen. A breach back below of the noted pennant could see another retest of $0.2500, which has been heavily defended of late by the buyers. The support in and around the noted round figure plays a vital role in protecting XRP from slipping down at $0.2000. It is important to note that XRP/USD has not traded below the zone of $0.2500-$0.2000 since November 2018.
Once the price has completed the current pullback and successfully retests the pennant, then further upside will be eyed. An entry following the daily retest around $0.2550 would be viable, with upside targets at $0.3000, $0.3700 and then $0.4000. Stops would be placed just below the pattern, $0.2250, which is also underneath an area of demand,
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.
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