Ripple‘s XRP started the new week in the region between the strong support at $0.46 and the strong resistance at $0.50. The popular altcoin, moving around $0.46 throughout the Asian trading session, has been almost completely static since the weekend.
XRP Price Could Take off with Breakout of Bull Flag Formation
According to the current short-term technical outlook, the 100-day Exponential Moving Average (EMA) limits the upward movement to $0.4727. On the other hand, the cross-border money transfer altcoin manages to stay above the $0.46 support, with its 200-day EMA standing at $0.4574.
The sixth-largest cryptocurrency with a market cap of $24.5 billion and a trading volume of $435 million, also the fifth-largest altcoin, seems to be preparing for the next major breakout thanks to a bull flag formation on the daily chart. The bull flag formation signifies a continuation pattern of a bull trend after a pause, as was the case when XRP’s price soared from $0.413 to $0.56 in May. The formation consists of three distinct phases: the flagpole, the flag, and the breakout. A sharp price increase forms the flagpole, while the flag is a consolidation stage with parallel support and resistance lines. A breakout occurs when the price continues the upward trend.
Investors waiting for new purchases in XRP may want to act as soon as the price surpasses the resistance of the said formation. More cautious investors may benefit from waiting until the altcoin surpasses the intermediate resistance at $0.48. In both scenarios, the nearest sequential targets for XRP will be $0.52 and $0.58.
The Most Negative Scenario for XRP
The longer the breakout required for a bullish formation to work is delayed, the more the price comes under bearish pressure. For XRP, this means that the support offered to the price by the $0.46 support and the 200-day EMA (purple) is weakening day by day.
Falls below the XRP buyer congestion area could turn the technical outlook negative and could lead to the XRP price moving towards intermediate supports at $0.44 and $0.40 respectively.
