Analyst Details Why XRP Price Could Rebound Above $2.5 After Market Dip

The cryptocurrency market has been under pressure after the Federal Reserve announced a 0.25% cut to interest rates. XRP, one of the most popular digital currencies, lost 18% of its price and fell from $2.7 to $2.2.

This crypto market crash was simultaneous to the test of Bitcoin prices which were trading at $108,000 and dropped to $100,000 causing participants to sell other altcoins as well.

Despite the bearish trend, EGRAG and other market analysts believe that XRP is building a potential double-bottom pattern in the bearish market.

This structure may open the way for XRP price to move back above the $2.5 level. That is, if other technical parameters are satisfied.

Double-Bottom Structure Could Signal a Reversal

According to EGRAG’s latest analysis on a 1-hour chart, XRP has managed to find support at $2.17-$2.27 after the recent drop.

This zone has emerged as the key level to watch for the short term direction of the asset.

The price of XRP is depicted trading lower than the 21-period Exponential Moving Average (EMA) at $2.39. In addition, 2.39 is a key-resistance level for the cryptocurrency.

The structure of the double bottom is the area of interest for EGRAG’s analysis. The first bottom was on December 16 when XRP hit a low of $2.33 before climbing back to $2.7.

The second bottom was set up when the price dropped to $2.17 in the recent past.

If this support holds, XRP could range trade within the said congestion area before testing the breakout above $2.7 neckline resistance to confirm bullish reversal pattern.

Indicators Show Potential Bullish Momentum

In addition, the Moving Average Convergence Divergence (MACD) on the 4-hour chart shows signs of bullish momentum emerging.

Histogram bars are now less in the negative zone and are showing signs of changing from bearish to bullish trends.

The MACD is plotting a bullish crossover at the signal line as the two lines are approaching a crossover point.

This formation indicates that XRP price may start to rally in the short term. If however, the crossover is completed and the histogram becomes positive.

Similarly, the Relative Strength Index (RSI) has remained at 46.11. This shows that XRP is moving out of the oversold zone where bearish momentum was predominant.

This is evidenced by the RSI that is rising and shifting closer to the 50 level, which is an indicator of a decrease in the selling pressure and an increase in the buying pressure.

This means that the price of XRP could be strengthening for a breakout in the bullish direction if it is able to rise above the 50 level.

Analyst’s Scenarios for XRP Price Movement

EGRAG had earlier provided two possible trends for the XRP price. The first scenario was the rise above $2.5 which would have led to further increases.

The second potential target level was set at $2.27 with consolidation in the $2.17 – $2.27 that formed a double-bottom pattern.

With the recent market dip, XRP appears to be following the second scenario. The asset has bounced off the $2.2 level and has therefore provided a consolidation zone for the asset.

This phase may help major Moving Averages to synchronise with the price, which will be a stronger foundation for the upward movement.

As of this writing, XRP price is trading at $2.28 having dipped by 1.50% in the last one day.

The post Analyst Details Why XRP Price Could Rebound Above $2.5 After Market Dip appeared first on The Coin Republic.