Inverse Head and Shoulders on the Daily Chart of XRPUSD
Ripple price has been steadily trading higher for the past few trading days. The recent bullish run on XRPUSD allowed the cryptocurrency to complete an inverse head and shoulders pattern. In forex trading, this chart pattern is considered as a bullish signal. It is characterized by a series of lows succeeded by higher lows. The recent uptrend (from connecting the lows of January 2 and January 24) is considered as a sign that momentum has shifted from the sellers to the buyers.
As of this writing, ripple price is testing resistance as the neckline. A bullish break above this price, above yesterday’s high at $0.2611, is needed in order for the XRPUSD to continue its rally. If this happens, we could see the cryptocurrency surge to its November 2019 highs around $0.3150.
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Ripple Price to Pull Back to Trend Line Support?
On the 4-hour time frame, we can see that ripple price has room to trade lower and still maintain its recent uptrend. Watch out for the confluence of support around $0.2370. For one, this price coincides with the rising trend line. Second, it aligns with the 50% Fib level when drawing the Fibonacci retracement tool from the low of January 24 to the high of February 2. Reversal candles around this area could mean that ripple price may still rally above $0.3100. On the other hand, a bearish close below the trend line at $0.2370 could mean that XRPUSD may still fall lower. There could be support around its January 25 lows at $0.2160.
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