Ripple's XRP cryptocurrency is trading on the front foot again.
Having hit a 4-week high of $0.27 at 14:00 UTC yesterday, the Ripple-U.S. dollar (XRP/USD) exchange rate is back to at $0.23 at press time – up 7 percent on the day, as per CoinMarketCap.
And though the spike has faded somewhat, there are reasons to be optimistic about the cryptocurrency's price going forward.
The strong bid tone in XRP may be associated with yesterday's revelation that American Express (Amex) and Santander have teamed up with Ripple for direct cross-border payments via the company's blockchain tech.
Though XRP itself is not being used, Ripple's blockchain network will help facilitate the near-immediate transfer of funds from Amex's corporate customers in the U.S. to businesses that bank with Santander UK. Ripple has also said it expects XRP to play more of a role in future partnerships.
Comments made by Ripple's CEO yesterday to Bloomberg can't be hurting the price, either. "It’s only a matter of time before central banks adopt blockchain to settle high-value, interbank fund transfers," Brad Garlinghouse told the news source.
But while the news flow looks supportive of prices, the charts also favor further upside in XRP.
The above chart shows:
- Rounding bottom formation.
- Relative strength index (RSI) above 50.00 (in the bullish territory).
- Prices trade above the 50-day moving average (MA) ($0.2172), but below the rounding bottom neckline level of $0.22.
A rounding bottom is a long-term reversal pattern that indicates a bearish-to-bullish trend change. A move above the neckline is usually considered a confirmation of the bullish trend.
- A close today (as per UTC) above $0.2288 would confirm rounding bottom breakout/bullish trend reversal and open up upside towards $0.30 (Oct. 16 high) and $0.3291 (Jun. 1 high).
- Any dips are likely to be short-lived, given the 5-day MA and 10-day MA is curled up in favor of the bulls.
- However, multiple 4-hour closes below $0.20 could abort the bullish view.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripple.
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