• With an impending bull cross of the 100- and 200-day moving averages, XRP/USD is looking ready to outperform its peers in the near-term.
  • While the long-term MA studies are biased bullish, the daily chart shows signs of bull exhaustion near $0.47.
  • A UTC close above $0.47 is needed to revive the short-term bull case and open the doors to $0.53 (Nov. 18 high).
  • XRP/BTC also shares a bullish technical set up in the form of a “cup and handle” continuation pattern.

XRP could outperform its peers during the next leg of the broader market bull run, as a widely tracked technical indicator is about to turn bullish for the first time since December.

The 100-day moving average of XRP’s price has met the 200-day price average at $0.3367 today and the former looks set to cross above the latter on Wednesday.

That would be the first bullish crossover of the 100- and 200-day MAs since December 21 – a confirmation of a long-term bearish-to-bullish trend change.

The previous crossover, however, had turned out to be a contrary indicator with prices topping out as $0.45 on Dec. 24 to hit a low of $0.28 by Jan. 28.

That XRP topped out just three days following the 100- and 200-day MA bull cross would not come as a surprise to those who are aware of the fact that the MA studies are based on past data and tend to lag prices.

That said, the bullish crossover witnessed on Dec 21 possibly failed, as bitcoin – the leading cryptocurrency by market value – carved out a bearish lower high above $4,200 on Dec. 24 and fell to lows near $3,300 by the end of January, dragging XRP and the broader market lower.

As of now, BTC is trading above $8,000, representing 100 percent gains on a year-to-date basis with long-term technical charts reporting bullish conditions.

As a result, XRP’s latest bull cross is unlikely to trap buyers on the wrong side of the market – more so, as the cryptocurrency charted a golden crossover, also a long-term bull market indicator, last week.

As of writing, XRP is changing hands at $0.4145 on Bitfinex, having hit a low of $0.39315 earlier today. The third largest cryptocurrency by market value is up just 15 percent on a year-to-date basis. Meanwhile, names like litecoin, binance coin, bitcoin cash, cardano are reporting triple-digit gains.

Daily chart

While the golden crossover (bull cross of 50- and 200-day MAs) and the impending bull cross of the 100- and 200-day MAs is signaling a long-term bull market, the repeated failure to find acceptance above $0.47 seen in the last two weeks indicates short-term bullish exhaustion.

Hence, $0.47 is the level to beat for the bulls. A high-volume UTC close above that level would expose the next major resistance lined up at $0.53 (Nov. 18 high).

The case for a convincing move above $0.47 would weaken if the price validates Monday’s bearish engulfing candle with a sustained move below $0.41.

The price did dip to $0.39 earlier today only to recover to levels above $0.41. Therefore, the immediate outlook is neutral.

Cup and Handle

XRP’s bitcoin-denominated price chart is also showing a technical development in favor of the bulls, known as the “cup and handle” continuation pattern.

In order for the pattern named after its resemblance to a physical cup of coffee or tea to be valid, it must form in an uptrend a meet a few requirements, all of which can be seen on XRP/BTC price chart

First, the price must rise in an uptrend and then collapse as investors find an intriguing price level to take profit and liquidate positions. The high selling here clears some overhead supply that will benefit the rally after the pattern fully forms.

We can see this took place after XRP/BTC rose nearly 40 percent from May 13 to May 16 and then depreciated roughly 20 percent by May 26 as it formed a rounded base above the previous low, which is the next requirement of the pattern.

Soon after the rounded base is formed, buy volume should pick back up as buyers look to take advantage of the discounted prices, in turn appreciating to form the right side of the cup. On XRP/BTC, the price rose 17 percent from the May 26 low to fulfill this aspect of the pattern.

Last but not least, sellers will return once more to take profit as a previous resistance level approaches, again reducing overhead supply for the rally to follow. Another rounded recovery will then form known as the “handle”, which is the last stage before the bullish continuation effect of the pattern.

As shown in the images above, this stage is where it seems XRP/BTC is currently in its cup and handle formation.

An initial move can be estimated by adding the size of the cup to the breakout point, which in this case would suggest XRP/BTC could rise to roughly 6130 sats in the near future, whereas acceptance below the low of the handle (4904 sats per Binance prices) would invalidate the pattern.

Disclosure: Omkar holds no cryptocurrency at the time of writing, Sam holds several, please see his bio for more information. 

XRP image via Shutterstock; Charts by Tradingview

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