Earlier this week, ripple price surged by almost 5% in one trading day and rallied above the $0.2100 handle. In doing so, XRPUSD broke a critical resistance level on the daily time frame. When you connect the highs of April 29, May 9, and June 2, you can see that the cryptocurrency broke the trendline resistance. Often times, a trendline break is seen to mean that buyers are dominating trading. However, it’s worth pointing out that ripple price failed to trade past resistance at the 200 SMA. In fact, a spinning top candlestick also formed which could indicate hesitation among buyers.
Ripple Price, Daily Chart
A closer look at the 1-hour time frame would also show that the cryptocurrency has recently made lower highs after a series of higher highs. Consequently, a head and shoulders chart pattern has formed. When you enroll in our free forex trading course, you will learn that this is widely considered as a bearish reversal indicator. A strong close below the neckline support at $0.1990 could trigger a bigger sell-off to the near-term support at $0.1835 where XRPUSD bottomed on July 7.
On the other hand, a strong close above the most recent high at $0.2027 could invalidate the chart pattern. It could indicate that there are still enough buyers left in the market. Should this happen, we could soon see ripple price continue its rally to $0.2115 where it previously peaked on July 9.
Head and Shoulders on 1-hour Chart