Disclaimer: The results of the following analysis are the sole opinions of the authors and should not be construed as investment advice.
After the evening candlestick formed near $0.79 from its mid-April high, XRP saw a massive sell-off. After breaking through an important price point, altcoin is now constantly fighting to find a break beyond the 20 EMA (red) boundary.
In particular, many indicators rise near the oversold zone, suggesting a temporary upside. However, if the coin does not find a comfortable closing price above its control point (POC, red), the chances of a strong recovery are relatively slim. At press time, XRP was trading at $0.4198, up 1.83% in the last 24 hours.
XRP daily chart
In particular, the possibility of a short-term buy reversal is jeopardized after the token has lost 49.13% over the past two weeks. The decline was down to a 15-month low of $0.336. After a steady decline in trading volume, XRP’s recent recovery phase looked relatively weak.
Over the past week, altcoins have seen a bearish pennant setting during the daily timeframe. The control point (POC, red) is limiting buying efforts as expected, while bearishness continues to drive the current trend.
The disparity between 20 EMA and 50 EMA (turquoise) has grown too wide due to worsening sales efforts. In the long run, the bull will now be eager to begin the recovery phase. However, a fall below the pennant delays the near-term revival outlook beyond the POC.
The Relative Strength Index (RSI) showed a gradual upward trend in the oversold zone. After reviving from the 33-period support, the index formed bullish trendline resistance (yellow). A reversal from this level confirms a bearish divergence with the price and triggers a short-term decline in the chart.
The MACD line, on the other hand, attempted a bullish crossover aimed at closing the gap from zero. As the line is still far from the MACD’s equilibrium, the bulls have a long way to go to gain an edge in their current momentum.
Altcoins are in a predicament. Due to the over-reading of the RSI and the gap between the 20/50 EMA, buyers will be aiming to engage in the short-term rally. However, with low volume and bearish pennant settings, XRP could see a somewhat delayed rally.
Finally, keeping an eye on Bitcoin’s movements and broader sentiment will be important to complement the aforementioned analysis.