A Closer Look
XRP's recent price action has been a rollercoaster ride, leaving investors wondering whether the surge is the start of a bull phase or a final fakeout before a downturn.
XRP surged from $0.50 to $0.70, breaking out of a descending channel. However, a pullback below $0.65 suggests a possible continuation of sideways movement or a test of lower support levels.
Despite the rally, the Relative Strength Index (RSI) signals overbought conditions, raising questions about the sustainability of the breakout.
XRP rallied from $0.38 on July 5 to $0.66 by July 31 after forming a symmetrical pattern with a potential breakout at its peak. This pattern suggested a breakout above resistance was possible, but the price entered a period of sideways trading after the July high.
A slightly descending channel formed, with the horizontal resistance of $0.65 playing a significant role. On November 4th, XRP fell to a lower low of $0.50 and started increasing again, reaching a high of $0.70 today, attempting to break out from this structure and begin a new uptrend.
Despite the 40% increase from the November 4th low, an immediate pullback kept the price below $0.65 again. The daily chart RSI is overbought, indicating that the price was overextended.
Was this the first sign of the coming bull phase, or was the fakeout a final attempt before a decisive downturn?
After an initial surge to $0.64 between July 5 and 17, XRP experienced a sharp drop to $0.43, triggering a corrective ABC wave. September's failed breakout points to a second ABC wave, with a following, third one making a WXY sequence of the higher degree.
The low on November 4th marked the completion of this third ABC, with the following rise potentially being the next advancement in the new bull phase. Despite the bullish price action, more sideways movement is still possible.
Our current assumption is that the sideways range is the corrective wave 2, ending as a WXY correction. However, it might get prolonged by two more waves, ending as a WXYXZ one.
To confirm the bullish outlook, we must see XRP continue its upward trajectory and reach values over $0.80. Failure to do so could indicate that the price still faces challenges at $0.65 and doesn't have the strength to overcome the seller's strength.