Ripple (XRP) failed a bullish breakout. Should we wait for the sale now?
Date: 2023-07-01 Author: Karina Ziganova Categories: IN WORLD
Ripple managed to briefly overcome an important long-term resistance level. However, XRP failed to close above it, which led to a subsequent drop
Due to this rebound and subsequent drop, the price of the XRP token of the Ripple project has probably started a new downward movement. This scenario is supported by both the behavior of the Relative Strength Index (RSI) and the results of wave analysis.
Ripple bounced off long-term resistance
As the results of technical analysis show, the price of XRP has made three unsuccessful attempts to overcome the long-term resistance level of $0.53 since September 2022. Due to the fact that it lasts so long, it represents a very important area of resistance. A break above it can significantly accelerate the growth rate.
Over the past two weeks, as a result of two bounces, candlesticks with a long upper wick have formed on the chart (which indicates pressure from buyers). As a result, in June, the price of XRP nullified almost all of the gains achieved in May.
The Relative Strength Indicator (RSI) indicates the potential for further decline. Traders use the RSI as a momentum indicator to assess whether the market is overbought or oversold, which helps them make the decision to accumulate or sell an asset.
When the RSI values are above 50 and the trend is upward, the bulls have the advantage, and vice versa. Even though the RSI is currently above 50, it is declining, indicating weakness.
In addition, the RSI index gives signals of bearish divergence, which often portends a decline.
The presence of this bearish divergence within an important resistance area, combined with a bearish candlestick, reinforces the likelihood of an approaching bearish trend reversal.
The forecast for XRP does not look rosy
Meanwhile, the wave analysis of the daily timeframe shows that the price of XRP has reached its highest point and now it is expected to decline in July.
This year, XRP's movement during growth has clearly formed three-wave patterns (white), indicating potential corrections
The price drop in April and May was five-wave (highlighted in the chart). Therefore, if this wave analysis is accurate, then XRP is now in another five-wave decline (black) with a likely low around $0.40.
If both declines are of the same length and magnitude, the price of XRP will bottom out around July 25 at $0.39. It is worth emphasizing that this is only a theoretical and approximate estimate.
A more accurate forecast will depend on how the movement of the coin will develop further
Despite this bearish outlook for XRP, a rise above the high of the second subwave (red line) at $0.53 would mean that the trend is still bullish.
In this case, the price of the token can quickly rise to the next resistance at $0.90.
