Ripple (XRP) has come the last mile after hitting a low of $0.326 and surged 16% in the past 48 hours. While everything looks green and bullish, XRP is still facing the resistance of $0.381, and if the coin fails to break above, that means a correction is looming.
A candlestick close below $0.381 can demystify the bearish outlook for XRP. Ripple price showed colossal strength as it ricocheted off a support zone which then sparked a bullish streak seen over the past couple of days.
While it looked extremely bullish as it was able to maintain momentum at $0.37, investors cannot be overconfident as the recent rally could lead to a retracement or extension.
XRP registers a 16% increase in 48 hours
Ripple price was able to break through just below the trendline indicating that the buying pressure has stopped. Even so, Ripple was able to pull through after absorbing it at $0.326. This obviously sparked a 16% increase in just over 48 hours.
XRP price can either break above $0.381 and make it a support line or retrace and retest the $0.340 area.
Looking at current market sentiment, a retracement is more likely to occur if BTC price turns around. Indeed, the XRP price may still fall back to the $0.340 support area. Now, if the barrier or resistance zone is breached, the Ripple price may plunge to the $0.326 level.
However, in the event that Ripple price forms a daily candlestick that breaks above $0.381, it invalidates bearish confluence. With this development, the price of XRP can reach $0.439.
Can XRP bypass the bearish divergence pattern?
Ripple is currently painting a bearish divergence formation which should be taken seriously. The only way around the divergence is if XRP price dives or if XRP price can successfully rise and bypass the invalidation point seen at the $0.48 line.
A warning was recently issued on July 26 as the price of XRP deviated from a trendline that dates back to April last year. Indeed, a target of $0.24 has been announced, based on the Fibonacci and Elliot Wave projections.
On July 27, Ripple price was seen reversing with an increase in volume and an extreme bullish candle. Additionally, a 3-day morning star pattern has formed which encourages traders to stick to bullish targets.
The XRP price can reach $2 or even $10 on a fine day. However, right now, being overconfident about it can be extremely risky in terms of profit.
XRP total market cap at $17.9 billion on the daily chart | Source: TradingView.com Featured image from Medium, chart from TradingView.com