Disclaimer: The results of the analysis below are the author’s sole opinion and should not be considered investment advice.
XRP has performed very well over the past few days. It is up nearly 30% in the past week alone, thanks to a rise from $0.32 to $0.42.
Ranking for coins 7th place on CoinMarketCap With a market cap of $20.16 billion, that’s a staggering increase. Going forward, can the bulls maintain their momentum, or is the range-bound price action likely to continue?
XRP – 3 Day Chart
Source: XRP/USDT on TradingView
The 3-day time frame shows that the market structure has turned bullish. The price has formed a range between $0.42 and $0.31 (yellow).
In August, XRP climbed slightly above the midpoint, but was unable to close the 3-day candle above $0.38. At the time of writing, the recent and continuing candle looks likely to close above the August high.
If this happens, the D3 structure will turn bullish. Patience could see the bulls pay off, especially if XRP can successfully flip the range high into support.
Until that happens, however, it may be a safer mindset for traders to trade within that range. In general, a continuation of a range occurs more frequently than a strong breakout.
Fundamental
On the daily time frame, the market structure has taken on a bullish bias. However, this may give buyers a false sense of security. A move up to test liquidity in the $0.42-$0.45 area before a sharp decline is likely.
Prices seek liquidity, and such a move could force short positions to close at a loss and convince open traders that a breakout is imminent. A plunge to $0.36 and $0.34 could force the same buyers to sell at a loss and add further downward momentum.
While this could happen, the indicator implied a breakout above $0.42. OBV has formed a series of higher lows since mid-June, indicating stable demand behind XRP. The RSI is also well above the neutral 50, showing strong bullish momentum.
in conclusion
Which way will XRP tilt? A revisit of $0.42 to $0.45 would be a sell opportunity for a deviation above that range, rather than a buying opportunity in anticipation of a breakout. That said, these indicators show a bullish bias.
All in all, risk-averse traders can choose to wait for a rejection at $0.42-0.45. Alternatively, traders more comfortable with risky conditions can open short positions in the $0.42-$0.45 area, with take profit targets at $0.36, $0.34 and $0.31 and a stop loss above $0.45.
