XRP Price Analysis: Deadly Daily Close Below Vital Support
- XRP/USD was moving within a pennant pattern for 10 weeks, but the bears have forced a daily closure below.
- Eyes are on a retest of the mentioned structure; a failure to breach back above could be punishing.
XRP/USD has closed in the red firmly over the past two consecutive sessions. However, generally in comparison to its peers, it has held ground well. This being the case within the large bear market currently being observed for cryptocurrencies. The downside pressure seems to have finally taken its toll on XRP bulls. XRP/USD saw a daily candle closure below a key supporting trend line.
Broken Pennant Pattern
Price action had been moving within a pennant pattern structure, since the 21st September. This came after the excessive upside movements that were seen. XRP/USD at the time had aggressively spiked up towards $0.8000, before quickly retracing back south. As a result of these big moves, the price went into consolidation mode, forming a pennant.
The bulls attempted a breakout to the upside form the pattern on 30th September and then again on 6th November. Rejection was served to those attempts. Market bears, on the other hand, worked their line of support on several occasions in October and November. No doubt that this consistent testing of this area caused an eventual break to the downside, as has been seen.
On the daily closure of 20th November, the price finished the session below the lower supporting trend line of the pennant. This leaves the odds stacked heavily in the bears favor. Eyes will now be on a potential retest of the structure above. Such a move, as playing to the textbook, could invite again some heavy selling pressure from the bears.
Looking to the downside, just underneath the mentioned technical pattern, there is a strong touted demand zone. Between the months of October and November, this area has proven to be of assistance. The last legs of this would be around the psychological $0.4000 mark down to $0.3850. A breakout to the downside from this could be extremely punishing.
The next major area of support, after the above-mentioned region, is seen deep south. There isn’t much in the way of support, until down at the $0.3000-0.2500 range. XRP/USD was last seen trading here on 18th September. An area that was clearly very attractive for buyers, seeing a large push to the upside from this territory.
In terms of upside resistance, as mentioned earlier, this should now be noted underneath the breached pennant pattern. A retest would likely to the $0.4800 come into force. Should odds be defied and the bulls earn a break above, the upper trend line of the pennant would likely be tested, tracking around $0.5300.
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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