finbold.com
The XRP token has been trading in a downtrend, making lower highs since July 2023. However, technical analysis indicators now suggest a breakout and an incoming surge for the cryptocurrency.
In particular, a bullish divergence in XRP’s weekly chart with its Relative Strength Index (RSI) was spotted by CoinsKid. The renowned trader posted this analysis on X on February 27.
Notably, the expert expects an XRP price surge to $1.30 and opened a long position on the token a few weeks ago. XRP price today currently trades at $0.55, making this trade a 135% potential opportunity if it bears fruit, according to the analysis.
A bullish divergence happens when the price falls, while the indicator signals a strong momentum.
XRP price analysis and potential surge
Nevertheless, XRP is still struggling to break from the downtrend since it reached $0.927 in July 2023. Moreover, the token has slightly broken down from an uptrend support ongoing since January 2023.
At this point, XRP tries re-entering the triangle formed by both trends and tests the strong resistance of $0.56. The latter follows the 20-week exponential moving average (EMA), a relevant technical indicator with a historical impact on the digital asset.
Historically, when XRP breaks from the 20-week EMA, the price makes a huge move – either upward or downward. So far, the price has been mostly stable since the last breakout, which opens the possibility for further drops.
However, a breakout to the upside would validate CoinsKid’s spotted bullish divergence. This could trigger a massive surge, potentially fueled by the current sentiment observed in other cryptocurrencies. The weekly RSI still has to break from its own downtrend above the neutral 50 points to form a conclusive divergence.
All in all, technical analysis trading is a game of probabilities. Thus, CoinsKid believes the odds are favorable for opening longs. Still, XRP’s price action highly depends on developments related to Ripple and the community. The former has already dumped 260 million tokens in February, worth over $143 million at current levels.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.