September 24, 2022


Disclaimer: The findings of the following analysis are solely the opinion of the writer and should not be considered investment advice.

XRP has performed incredibly well over the past few days. It has gained nearly 30% in the past week alone, rising from $0.32 to $0.42.

For a ranked coin 7 on CoinMarketCap with a market cap of $20.16 billion, it was a remarkable jump. Looking ahead, can the bulls maintain the momentum or is the range-bound price action likely to continue?

XRP- 3-day chart

XRP Hits Range Highs, Can Further Gains Be Expected?

Source: XRP/USDT on TradingView

The 3-day time frame showed that the market structure has taken a bullish turn. The price formed a range (yellow) between $0.42 and $0.31.

In August, XRP climbed slightly above the mean, but was unable to close a three-day candle above $0.38. At the time of writing, the most recent and persistent candle looked like it might close above the August high.

If that were to happen, the D3 structure would turn bullish. Patience could be rewarded by the bulls, especially if XRP succeeds in turning the top of the support range.

However, until that happens, trading within a range may be a safer mindset for a trader. In general, a continuation of the range occurs more often than a strong breakout.

Reasoning

XRP Hits Range Highs, Can Further Gains Be Expected?

On the daily time frame, the market structure has already assumed a bullish bias. However, this could lull customers into a false sense of security. A move higher to test the liquidity of the $0.42-$0.45 region before a sharp decline could also occur.

Price is looking for liquidity, and such a move could force short positions to close at a loss, and also convince side traders that a breakout is imminent. A drop towards $0.36 and $0.34 could force the same buyers to sell at a loss and add further downside momentum.

While this scenario could play out, indicators pointed to a break above $0.42. OBV has formed a series of higher lows since mid-June and indicated steady demand behind XRP. The RSI was also well above the neutral 50 to indicate strong bullish momentum.

Conclusion

In what way would XRP be relied upon? A revisit of $0.42-$0.45 would be a more likely opportunity to sell as a pullback above the range rather than an opportunity to buy in anticipation of a breakout. However, the indicators showed a bullish bias.

To conclude, a risk-averse trader might opt ​​to wait for a bounce at $0.42-0.45. Alternatively, more risk-averse traders may look to enter short positions within the $0.42-$0.45 zone, with take-profit targets of $0.36, $0.34 and $0.31 and a stop-loss above $0.45 .



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