XRP price is among the best-performing cryptos, up 2.5% to $0.5052. The cross-border money transfer token is preparing for the next bullish launch above $0.5, its immediate support, to $0.56 – the first breakout target which may clear the path to the psychological $1 resistance.
XRP Price Bulls Nurture An Inverse H&S Pattern Breakout
The price action in September characterized by the initial drop to $0.4588 and the ongoing rebound has formed an inverse head and shoulders (H&S) pattern. If the expected breakout above the neckline resistance at $0.51 is validated, XRP price may climb to $0.56, representing a 10% move.
An inverse H&S is the opposite of the normal H&S pattern. It results in a bullish trend reversal when validated. Traders wait until the price has ascended above the neckline resistance before placing buy orders and projecting a breakout equal to the height of the pattern.
As bulls push for gains above the immediate resistance at $0.51, support at $0.5 must be defended at all costs. Bulls have since early this month struggled to gain ground above this support.
The Money Flow Index (MFI) reveals that buyers have the upper hand. It also compares the amount of money flowing in and out of XRP markets.
XRP is bound to uphold the uptrend if the inflow volume continues to surpass the outflow volume. However, if the MFI reaches the overbought region above 80, it might signal the need to close the long positions or proceed with caution.
Indicators such as the SuperTrend reinforce the bullish outlook while trailing XRP price. This index takes into account the average true range (ATR) to gauge the volatility in the market. When it’s holding below XRP, it implies that the path with the least resistance is to the upside.
Bulls must not rest until XRP price is trading above the monthly open at $0.5115. With this level converted into higher support, XRP would be in a better position to explore the inverse H&S pattern and push for gains above $0.56, thus bringing the next key hurdles at $0.85 and $1 within reach.
Traders should also focus on the XRP price daily open at $0.5033, which is serving as a short-term support area. Closing the day above this level implies that XRP is stable and awaiting a catalyst to extend the uptrend to $1.
The 100-day EMA (blue) at $0.5013 and the 50-day EMA (red) at $0.4971 are in line to serve as additional support areas in case XRP is rejected and slides below $0.5.
Meanwhile, for investors deliberating between XRP price and Cardano, it might be prudent to settle with the former as the chart below shows XRP has in the last year continued to outperform ADA.
The XRP community is also looking forward to the victory party later this month as Ripple celebrates the July win against the SEC. Ripple is expected to make several announcements during the event, including the possibility of an IPO and a settlement with the agency to avoid going to trial. XRP price is expected to perform well during and after the “Proper Party” on September 29.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.