Break Out Incoming? XRP Ready to Break Key Resistance Barrier
Ripple’s XRP has failed to spark interest among investors because of the downward price action it has experienced over the past two years. However, the international settlements token is currently testing a key resistance barrier that may break and allow it to reach higher highs.
XRP Looks Poised to Breakout
Despite the bullish price action that Bitcoin and Ethereum have seen over the past few days, XRP has failed to make a new monthly high. Its price was able to surge over 7.5% since July 21, as nearly $20 billion entered the crypto market. However, the cross-border remittances token continues to be rejected by a stiff resistance barrier ahead of it. Prices have also trended down because of Ripple and insiders have been flooding the market with tokens.
The 200-day moving average appears to be holding steady, preventing Ripple’s native token from achieving its upside potential. This hurdle has been able to put a stop to any upward price action since late April. Since then, each time XRP has risen and tried to break above this moving average, what followed was a steep correction.
Now that the international settlements token is attempting to move past this resistance wall once again, the outcome could be different.
Some of the most prominent analysts in the industry maintain that the higher the number of times a resistance level is tested, the weaker it becomes. Therefore, the 200-day moving average could be losing its strength since XRP has tried to close above it three different times in the past three months.
A further spike in the buying pressure behind this cryptocurrency may help validate the bullish outlook. If this were to happen, XRP could rise towards the next significant areas of resistance around the 50% or 61.8% Fibonacci retracement level. These hurdles sit at $0.23 and $0.26, respectively.
Given the high levels of correlation in the market, it is very likely that XRP will follow Bitcoin and Ethereum’s trend. Investors must watch out for a daily candlestick close above the 200-day moving average because only this can serve as confirmation of the optimistic scenario.
Failing to do so, traders would likely see the upward price action get rejected as it happened in the past three months. An increase in sell orders around the current price levels might send XRP down to the 38.2% or 23.6% Fibonacci retracement level. These critical areas of support sit at $0.20 and $0.17, respectively.
It remains to be seen whether or not XRP will finally be able to break out of the downward trend it entered after it peaked at $3 in January 2018.