On the daily time frame of XRPUSD, we can see that ripple price has been making higher lows following a series of lower lows. In turn, this has allowed an inverse head and shoulders pattern to form. In forex trading, this chart pattern is considered as a bullish signal because the recent lows suggest that the momentum has shifted from sellers to buyers. We could see a rally above $0.3100 where the cryptocurrency peaked on July to October 2019. However, ripple price will first need to close higher than its January 18 highs at $0.2538 and break neckline resistance.
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On the other hand, if buyers do not immediately dominate trading for the next few hours or days, we could see XRPUSD fall. It has some room to trade lower and still maintain its uptrend. By connecting the lows of January 2 and January 25, we can see that there seems to be trend line support around the $0.2300 handle. This price also looks to coincide with the 50% Fib level when you draw the Fibonacci retracement tool from the low of January 24 to yesterday’s high. Reversal candlesticks around this price could indicate that the uptrend on XRPUSD would continue.
However, be wary of a strong bearish close below this price. It could indicate that there are not enough buyers and support did not hold. In turn, XRPUSD may fall to its January 2020 lows around $0.1850.
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