XRP, the digital token used in Ripple Labs’ payments network, was outperforming bitcoin and other major cryptocurrencies on Tuesday, with a longer-duration technical indicator flashing a bullish signal.
The token’s price was around 48 cents at press time, up 9% on a 24-hour basis, based on CoinDesk 20 data. Other prominent cryptocurrencies such as bitcoin, ether, chainlink and litecoin were nursing moderate losses.
XRP’s 50-week moving average crossed above the 100-week moving average (MA) earlier this month, confirming a pattern known in price charts as a “golden crossover” – a long-term bullish indicator.
Traders and chart-reading analysts often see the golden cross as a sign of a definitive uptrend. As such, the latest cross may attract stronger buying pressure from trend-following traders, leading to continued price gains.
XRP’s weekly chart shows major resistance at 80 cents. The area has capped gains multiple times since September 2018.
Readers, however, should note that the golden cross isn’t the Holy Grail of the market and often traps buyers on the wrong side of the markets. That’s because moving averages follow prices. By the time the crossover happens, an asset is sometimes overbought and due for a correction.
XRP, however, looks far from being overbought, with the daily and weekly chart relative strength indices hovering well below 70.