While many altcoins have been showing significant strength during the recent weeks, some have been lagging. One of these coins is XRP (XRP), which is still hovering around key support and has yet to show any upwards pressure recently.
Exactly what is keeping XRP pinned under the descending trendline? Let’s find out through the charts.
Crypto market daily performance. Source: Coin360
XRP/BTC faces a 2-year downtrend
XRP BTC 12-hour chart. Source: TradingView
The XRP/BTC chart shows the digital asset currently attempting to overcome the significant downwards trendline. As of late, many altcoins have been breaking out of their downtrends and notable examples are Ethereum Classic (ETC), Cardano (ADA) and, even more recently, Icon (ICX).
Ripple seems to be lagging but could be in for a substantial move as well.
XRP BTC 4-hour chart. Source: TradingView
The 4-hour chart is showing a clear breakout of a 2-months downtrend. This breakout was retested a few days ago at 0.00002660 satoshis. Right now, XRP is facing the next big hurdle in the red area around 0.00002950-0.00003000 satoshis.
Breaking through this level will seemingly take off the price towards the next hurdle and maybe trigger more investors to step into this coin. The next target is found in the 0.00003750 satoshis area.
Is XRP ready for a 180% move?
XRP BTC 1-day chart. Source: TradingView
When looking at the daily XRP chart one can see that there’s more potential upside to be attained.
The last time XRP broke such a tremendous downtrend, the price rallied 180%. A similar breakout and move would lead towards a target zone of 0.00006600 satoshis. It wouldn’t be a surprise to see such a move, as XRP usually makes a swift jump in a few days, without any retrace.
As the chart is showing, the previous breakout in September 2018 led to a push of 180%, after which price stabilizes and doesn’t make any higher highs.
The next step is to evaluate what signals the XRP/USD chart is flashing now?
XRP/USD breaks its 2-year downtrend
XRP USD 2-day chart. Source: TradingView
The XRP/USD pair is frontrunning the XRP/BTC pair as it already broke the 2-year downtrend. However, does this provide a rationale for one to be bullish at this point? Slightly. Despite the recent progress, there’s still a big hurdle to tackle before real bullishness can begin.
The $0.30 resistance level (red horizontal rectangle) must first be broken. This level used to be a support for a substantial time in 2018 and 2019 and now it needs to be broken through. If XRP can break above this level, a new rally is likely to occur towards the next resistance zone around $0.55.
XRP looks identical to January 2016
XRP USD 3-day chart. Source: TradingView
Many similarities can also be found between today’s price action and XPR’s market structure at the beginning of 2016. The same similarities are shown in the XRP chart. The price of XRP fell below the support in 2015. This breakdown led to a significant push of 200% and the breakout of a downtrend.
After this, the price stabilized in a sideways range before the big surge at the end of 2017 started.
A similar movement occurred in recent months on XRP. A breakdown of the significant support of $0.30, leading to a drop to the next support level at $0.17. Quite remarkably, a similar downtrend is being tested right now. Additionally, XRP is trying to get back into the range.
If a similar move occurs, a rally towards $0.55 is on the table and likely to happen after XRP breaks through $0.30.
Will Stellar Lumens follow XRP?
If XRP moves, then Stellar Lumens (XLM) usually follows. The XLM/BTC pair is showing signals similar to the XRP chart.
XLM BTC 1-day chart. Source: TradingView
The XLM chart shows a cycle bottom in September, after which a retest took place in January 2020. This retest led to a rally towards 0.00000750 satoshis, which was a temporary resistance. The price stabilized in the blue rectangle, which shows a successful S/R flip.
If buyers are stepping in and the momentum turns upwards, continuation towards 0.00000950 satoshis is a strong possibility to look for.
XLM BTC 4-day chart. Source: TradingView
The 4-day chart shows the full XLM cycle since it first listed. Stellar Lumens made a full retrace from the bull cycle in 2017 and found support there.
The main similarity with XRP is the retest done in January at this level; a confirmation that support is found at this level and buyers are stepping in.
Interestingly enough, there’s a massive gap in the chart. The first resistance of XLM against BTC is the 0.00000910 satoshis level. However, breaking above this level would imply a continuation of 0.00002050 satoshis as the next resistance — a move of more than 200% from the current price level.
XLM/USD faces 2-year downtrend
XLM USD 4-day chart. Source: TradingView
The XLM/USD chart shows a significant 2-year old downtrend. Remarkably, support is found at the levels before the big surge of December 2017 and after that, the price of Stellar Lumens surged from $0.04 to $0.065 and confirmed the support of $0.053.
What would occur if the price of Stellar Lumens breaks through the 2-year old downtrend? Continuation of the red lines (on the chart) is likely to occur.
The first target zone from here would be $0.09, but a move towards $0.187-0.19 is also on the table. Such a move would mean a surge of more than 200% from here.
Is that unnatural to expect? Not at all as we’ve seen similar movements from other cryptocurrencies over the past week. A breakout of such a downtrend often leads to massive volatility and strong trend reversals.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of CryptoX. Every investment and trading move involves risk. You should conduct your own research when making a decision.
