An analyst has revealed that the level of XRP could see a pullback following the latest rejection of the cryptocurrency’s price.
XRP has seen a rejection in the centerline of an ascending parallel channel
As explained by analyst Ali in a new one after on X, XRP appears to be moving within an ascending parallel channel lately. An “ascending parallel channel” refers to a pattern in technical analysis that is used to identify upward trends and potential reversal points for an asset’s price.
As the name suggests, the pattern consists of two parallel lines that form the ‘channel’ within which most of the price action takes place. The top line is created by connecting higher highs, while the bottom strings together higher lows.
The upper line is more likely to see the asset encounter some resistance and be rejected back into the channel, while the lower line may provide support to it.
In the scenario that price breaks through these channel lines, a sustained break could occur. Naturally, a breakout above the top line would be bullish, while the one below the bottom line could signal the continuation of the bearish trend.
Just like the Ascending Parallel Channel, there is also the ‘Descending Parallel Channel’, which is clearly a pattern used when the market is in a clear downward trend.
Here is the chart shared by Ali showing an ascending parallel channel where XRP has been stuck for quite some time:
The parallel channel that the asset has been moving inside recently | Source: @ali_charts on X
As visible in the chart, XRP’s price top in July this year coincided with a temporary break above the top line of this ascending parallel channel pattern. Since this rejection, the item has not yet been able to reach the level again.
In the chart, the analyst has also drawn a third line: the midpoint between the two parallel trend lines of the pattern. This line also appears to have acted as resistance for XRP during the time it has traveled within the channel, as it has often reached local highs when interacting with it.
Recently, after bottoming out at the lower level following the previous rejection, the asset climbed to this midline and retested. However, it appears that its coin has been rejected as it has been sliding downward ever since.
“After facing rejection at the centerline of the channel, XRP could see a decline towards the lower bound around $0.55,” Ali explains. At the time the analyst published the chart, the asset was trading around $0.618, but has since seen a further decline of 5%.
With the coin continuing to trend lower, it seems possible that it will go all the way to the $0.55 level pointed out by Ali before a possible reversal is found. From today’s price, such a decline would suggest a decline of more than 6%.
XRP price
XRP has fallen towards $0.585 today as the cryptocurrency market as a whole has seen red returns.
Looks like the price of the asset has seen a sharp decline during the past day | Source: XRPUSD on TradingView
Featured image from Shutterstock.com, charts from TradingView.com
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