Could Ripple (XRP) Break Past Trend Line Resistance This Time?
Ripple (XRP) is close to the trend line resistance and has now found strong support at the 50 day exponential moving average. XRP/USD has also formed a golden cross which could be the perfect catalyst to see it break past the trend line resistance. We have discussed the possibility of a false breakout in our previous analysis. In order to trap in overly aggressive bulls at this point and for the whales to dump their coins on them, it is very likely that we might see this breakout. This is because the whales that drove the price of Ripple (XRP) this far in the past few months cannot just start dumping at these levels because that would be too obvious. If they sell, retail investors will panic sell. This is why they have to make it a little more convincing and for that a fake out is the most probable scenario.
Ripple (XRP) has tested this trend line resistance numerous times during the past few months. In technical analysis, when a certain level is tested over and over again, the probability of it eventually being broken increases. We are likely to see the same thing happen here and now that the price also has a strong support in the 50 day EMA in addition to the golden cross, this break out seems more likely than before. The golden cross will make it more convincing and a lot of people would want to get onboard just after the breakout in anticipation of the next bull run. This is when we will see a large number of retail traders start buying from the whales who will systemically dump their coins on them without having to cause any panic in the market. This is a market maker’s dream play and we are seeing all indicators point to this play coming into effect in the near future.
Ripple (XRP) has yet to break past the 50 day EMA against Bitcoin (BTC). The price has failed to do that since the beginning of the year but considering that it started an uptrend last month, we could see XRP/BTC break past the 50 day exponential moving average soon. The 200 day EMA might hinder movement to the upside but the price is unlikely to break pas the key trend line resistance anyway. This trend line resistance extends back to 2017 and is therefore a very strong resistance level that is not likely to be broken under current overbought conditions.
Ripple (XRP) is due for further upside against Bitcoin (BTC) short term but it does not have ample room for sustainable growth. The trend line resistance is very likely to stop the price after which it could enter another period of downtrend and eventually break below the horizontal support. This might be the last opportunity for cryptocurrency investors to sell before the next downtrend begins. That downtrend is going to be a lot slower than the preceding downtrend and long term value investors will have plenty of time to accumulate which means there is no reason to FOMO into the market at this point.