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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.