- XRP price stabilizing above the 50-week simple moving average (SMA), but May’s descending trend line impedes further progress.
- Oversold daily Relative Strength Index (RSI) triggers a three-day burst of 15% from the descending parallel channel midline.
- Ripple has compelling support around the June 22 low of $0.512.
XRP price has recorded a muted rebound after reaching an oversold reading on the daily RSI, trailing the three-day bounces recorded at the beginning of June or late May and casting doubt on the commitment and emotion behind the jump from the July 20 low. Therefore, as long as Ripple changes hand below the critical May 23 low of $0.652, the forecast remains neutral.
XRP price has not exuded confidence, keeping opportunities at arm’s length
Since the May collapse, XRP price has been casually plotting a descending parallel channel pattern with the midline granting superior support through most of the decline. The current rebound materialized near the midline, and the 78.6% Fibonacci retracement of the rally from the December 2020 low at $0.555. However, the Ripple rebound has not transformed into an impulsive rally, striking considerable resistance at May’s descending trend line.
To renew the spirit of the rebound, XRP price needs a daily close above May’s descending trend line around $0.612 and the May 23 low of $0.652, a point of resistance in mid-July. February and December 2020 highs fortify the May 23 low.
A daily Ripple close above the two levels does not open an easy path to higher prices, as the 50-day SMA rests at $0.693 and then the upper line of the descending parallel channel at $0.720. The layers of resistance continue with the 200-day SMA at $0.757 and then the neckline of a head-and-shoulders pattern going back to 2018 at $0.775. In total, XRP price needs to break six solidified resistance levels and rally 31% from the current price to escape the zone completely.
After the neckline, XRP price is free until the psychologically important $1.00, where bullish outlooks can be refined to bigger ambitions.
XRP/USD daily chart
Critical to the relentless climb through layers of resistance is the support afforded XRP price around the junction of the 78.6% retracement level at $0.555 and the descending channel’s midline at $0.531, marking a 10% decline from the current price. A failure to hold puts Ripple at risk of testing at least the June 22 low of $0.512 and potentially the channel’s lower line at $0.392.
Ideally, it would be a positive development if XRP price closed today above the May descending trend line. It would put Ripple in a better position to tackle the layers of resistance. Nevertheless, maintaining a weekly close above the 50-week SMA is a constructive beginning to a much-anticipated rally to the April high of $1.96.
Here, FXStreet's analysts evaluate where Ripple could be heading next as it faces stiff resistance.
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