XRP’s collective breach of ascending channels raises red flags

XRP’s collective breach of ascending channels raises red flags

November 11, 2019

XRP’s price has been under immense volatility off late.

24th September marked a collective fall for the entire crypto industry after which XRP continued to recover its valuation. The third-largest asset began to experience repeated surges and crash, but the token continued to consolidate between the resistance of $0.333 and $0.275 during the time period. At press time, XRP went under the support of $0.275.

On further analysis, it was observed that XRP may have entered a significant bearish period in both the long and short term.

1-hour chart

XRP/USD on Trading View

As mentioned earlier, XRP’s price was under the long term support of $0.275. Before the price navigated under the support, the valuation mediated within the trend lines of an ascending channel. From 9th to 11th November, the pattern was observed, following which a bearish breakout surfaced. The pullback dragged the valuation of XRP further down and the support of $0.275 was breached.

50-Moving Average and 100-Moving Average were also observed, completing a bearish crossover on 8th November; MACD indicator was significantly bearish as well.

4-hour chart

XRP/USD on Trading View

XRP’s 4-hour chart exhibited the formation of a similar bearish pattern. An identical ascending channel was formed in the chart which was breached at press time. The 4-hour chart also witnessed a decreasing trading volume during the same period, confirming the validity of the bearish drop.

Likewise, Relative Strength Index was hugely indicative of a bearish trend, as the indicator was heading toward the over-sold section.

Additionally, the 50 and 100 Moving Averages also completed a bearish trend reversal.

1-Day Chart

XRP/USD on Trading View

During analysis, a similarity between 1-hour and 4-chart is usually observed due to its short-term metrics. However, after observation, XRP’s long term 1-day chart bore a similar resemblance as well. An ascending channel was pictured as the pattern was breached with a bearish pullback, devaluing XRP’s price to under $0.275. The trading volume was inconsistent, hence it did not pin-point towards a trend but MACD was evidently bearish in the long term.

Rare comparability between the short-term and long-term charts indicated that XRP’s valuation may face strong bearish force in the coming weeks.

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