XRP has recovered from the recent market pullback and is attempting to confirm the $3.00 level as support. However, an analyst suggested that the cryptocurrency risks a new retest of the range lows before bullish momentum continues.
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XRP’s Daily Close Key For Momentum
XRP has reclaimed a crucial level as support while the crypto market stabilizes from this week’s market downturn. The altcoin has been trading sideways over the past week, hovering between $2.85-$3.10 range.
The cryptocurrency retested the range lows, holding the lower boundary as support during the recent market volatility. Now, the price surged 7% from Monday’s lows to the $3.08 area before retracing to the $3.00 mark.
On Wednesday, analyst Ali Martinez noted that XRP was rejected from local resistance, around the $3.10 area, for the third time, which could signal a new correction to the range lows similar to the previous attempts.
If the altcoin fails to hold the current level as support and loses the mid-range area, its price could drop to $2.83, risking a fall below the local range and a deeper correction.
On the contrary, if bullish momentum continues and the cryptocurrency breaks out of the crucial resistance, its price could rally to the August high levels, between $3.20-$3.40.
Similarly, analyst Cryptoinsightuk noted that XRP had a positive daily close, adding that the “RSI crossed bullish and even throughout this pullback we’ve seen no change in structure.”
Nonetheless, he suggested that the cryptocurrency needs to continue its momentum with a second day of follow-through price actions and trading volume. The market watcher asserted that a daily close above the $3.14 area will set up the stage for a rally to the $3.40 resistance in the coming weeks.
Is A 2017-Like Rally Coming?
After its July rally to its latest all-time high (ATH) of $3.65, the altcoin has been consolidating within a bullish pennant, with price compressing between the pattern’s resistance and support levels.
Analyst GalaxyBTC also noted that XRP has been compressing between two parallel levels, repeating its 2017 playbook. Previously, the cryptocurrency hovered between the previous ATH level and the rally breakout level, which was turned into support.
Following a consolidation period, the cryptocurrency broke out of this range and recorded a massive rally to its 2018 ATH. This time, XRP turned the $1.70 area into support last November and has been consolidating between this level and the previous ATH for the past eight months, which could suggest that the rally isn’t over yet.
If history repeats, a massive breakout will follow once the altcoin breaks out of the previous ATH resistance and turns it into support.
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Moreover, the analyst highlighted a key level in XRP’s trading pair against Bitcoin (BTC), explaining that the 0.00003014 area has been a resistance in the XRP/BTC chart over the past six years.
While the XRP/BTC pair continues to near this resistance, the market watcher considers that “the timing is perfect, as breaking out will put us well into price discovery on the USD pair.”
As of this writing, XRP is trading at $3.02, a 3.3% increase in the weekly timeframe.
Featured Image from Unsplash.com, Chart from TradingView.com