As XRP tries to climb to higher levels, one analyst confirmed that the altcoin is “doing what it needs to do” to continue its bullish rally, highlighting several key structures on key time frames.
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XRP Enters Inflection Point
After retesting the $1.90 area on Friday morning, XRP saw an intraday rise of 4.6% towards the middle zone of its local range. Over the past five days, the cryptocurrency has been hovering in the $1.85-$2.00 price range, failing to hold the upper zone of this range.
Market watcher ChartNerd be A major reversal pattern that could signal a massive price increase could be just around the corner, noting the altcoin is at a “critical inflection point” as it retests a macro support zone.
He explained that a running flat ABC correction formation is “an advanced structure where the failure of the ‘C’ wave to break previous lows are signals underlying bullish strength.”
XRP has mirrored the same structure for the past 400 days, which would point “toward a structural breakout, which would mark the transition from a yearly long base to a new primary uptrend” if it were to subside.
As the chart shows, “the wave counts repeating along the structure’s direction are clearly visible in XRP’s price action,” and as long as macro support remains around $1.80, the C wave “could work in the bulls’ defense.”
We could simply build a base above $1.80, which marks the C wave in this ongoing flat correction before the big breakout.
ChartNerd added that there could be a scenario where XRP diverges below its key support before a V-shaped recovery takes place. However, he warned that losing this area would not be healthy, detailing that the only way to negate the pattern would be for the price to close below the structure’s support, retest it as resistance and drop to a lower level.
XRP’s Price Defends Macro Support
The analyst emphasized the importance of the $1.80 level, noting that XRP has been defending this area for over a year and could lead to another all-time high (ATH) rally.
“This is a macro accumulation zone, and we apparently also have two major levels of bearish resistance for XRP,” he explained, highlighting that when the first multi-month bearish resistance broke, the altcoin rallied to a new all-time high.
It’s quite simple: we currently have a bearish resistance on our head, and we once had a contact point with this resistance at the high of $2.40 (…) So at this point, simplicity tells us: break the bearish resistance, and this is where XRP really starts to prepare for further expansion.
Based on this, ChartNerd claimed that if the altcoin defends the macro support at $1.80, a similar rally is likely. Likewise, he pointed out a bullish reversal structure building below the key resistance at $2.70 on the XRP chart.
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According to the post, the cryptocurrency formed a three-month bearish wedge pattern that was broken during the early January rally. Now, the price is retesting the breakout level of the pattern as support and could prepare to climb to the level where it started forming.
“So XRP just needs to defend the hold at $1.80, and this is where we can look for that kind of big expansion and try to push back to the $2.70 target,” before potentially calling into question the pre-Q4 range, he concluded.
Featured image from Unsplash.com, chart from TradingView.com