Neckline, Triangle, and Trend Line Break on XRPUSD
Sellers dominated yesterday’s trading on ripple price (XRPUSD). The cryptocurrency traded below support of the rising trend line, symmetrical triangle, and neckline of the head and shoulders chart pattern. Where is it headed to?
In forex trading, a symmetrical triangle is considered as a neutral indicator. However, the downside break on ripple price suggests that there are more sellers than buyers. Additionally, a head and shoulders chart pattern is highly-regarded as a bearish indicator. This neckline break is considered as a signal that there is more selling ahead of XRPUSD.
Ripple price chart, 1-hour
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Will Support at the SMA and Previous Trend Line Hold?
As of this writing, XRPUSD is testing support at the 100 SMA around the $0.2200 psychological handle. It also served as a previous resistance level on January 7. Reversal candles around this price may mean that ripple price may soon retest its previous support level (confluence of trend line and neckline) at $0.2330. If there are enough buyers in the market, a strong bullish close above that price may even suggest that XRPUSD is on its way to its recent high at $0.2500. It’s also worth noting that on the daily time frame, the cryptocurrency is retesting its previous trend line.
On the other hand, a strong bearish close below the 100 SMA could indicate more selling ahead of ripple price. The next floor is around its January 3 low at $0.1850.