The Ripple price is breaking out to the upside. Could this be the start of an XRP recovery that puts the elusive Dollar valuation back on the table?
The Ripple price has made a strong recovery from this week’s earlier weakness. XRP is currently trading at $0.5972, higher by $0.0050 (+0.90%).
The 20% rally from Tuesday’s $0.5140 low could not have come at a better time for XRP. The technical outlook had deteriorated so much that just three days ago, I asked, “is it RIP for XRP if this happens?”
And whilst, for a moment, the Ripple price appeared to be breaking down, XRP is now breaking higher.
The recent price action has increased Ripples market cap by $3.3 billion to $27.6b, ranking it as the 6th largest cryptocurrency.
Why the turnaround?
The crypto market as a whole is in the process of recovering from Bitcoin’s dip below $30,000. For once, the market leader has been the subject of some positive news flow and has steadied on Elon Musk’s comments that Tesla may accept BTC payments sometime in the future.
Notably, yesterday, the news wires were alight with reports that Stellar Lumens, Ripples’ rival in the remittance space, could be planning a takeover of Moneygram. This is a bone of contention for XRP investors, as due to Ripple labs’ ongoing lawsuit with the SEC, it was forced to abandon an earlier partnership with the legacy payment firm.
However, the price has shrugged off this news and is looking increasingly positive.
XRP technical analysis
The daily chart shows two clear trend lines. The first of which is rising support at $0.5600 from the 29th of December. This should be considered the long term uptrend and a significant support level for the Ripple price. Tuesday’s slide to $0.05140 was the first penetration of this trend in 2021 and therefore looked likely to trigger further losses.
However, Wednesday’s reversal lifted XRP above the support. As a result, follow-through buying forced XRP beyond the second significant trend line.
Since the 21st of may, Ripple has been capped by a descending trend visible at $0.5792 on the daily chart. Significantly, the trend line aligns with the 0.786 Fibonacci retracement level of 2021’s rally.
Therefore if the price manages to remain above this resistance-turned-support in today’s session, it will not only point to a false breakout on the downside but confirm the break on the upside.
This is clearly a positive development for the bulls and would target the 50-day moving average at $0.7067, and following that, the important 200 DMA at $0.9981.
And should the Ripple price recover the 200 DMA, the bulls will be aiming for $1.0000.
For now, the bias is on the upside, and a continuation of the rally looks probable. However, this bullish Ripple price prediction remains valid only if XRP remains above the trend line support.
A reversal below the rising trend line at $0.56000 swings the momentum back into the hands of the bears.