Weekly Chart
Observations:
Current Price Context
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Long-term bull breakout of descending channel triggered in mid-November leading to a $2.42 (492%) spike rally high of $2.91.
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Concurrent breakout above 200-week MA further confirmed strength and it followed a successful test of support earlier that week at the convergence of both the 20-day MA and 50-day MA.
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Following the $2.91 high XRP/USD formed a bull pennant and an upside breakout triggered on January 11, leading to a trend high of $3.40.
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This is a decision area as the $2.91 high completed two measured moves around the high. The rising purple arrows show a second measured move that extends the price distance in the first move by the 161.8% Fibonacci golden ratio. More recently, the light blue rising lines show the current move reaching 4.5x the initial rally at the current high.
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Two possible scenarios
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Either strength is retained leading to a continuation of the bull run with a breakout to new highs above $3.40, or a pullback to test potential support levels occurs first.
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Bull pennant breakout following a significant rally implies higher prices and continued strong momentum overall in XRP/USDT.
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Next upside targets are $4.10, $4.53 and $4.64 on the weekly chart.
Weekly support
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Begins with this week low at $2.91. It is an inside week showing relative strength as it has formed around the top third of last week’s price range. Otherwise, watch the prior trend high at $2.91 and $2.60 for signs of support.
Daily Chart – Trade Idea
Entry Strategy
Tight consolidation formed following $3.40 trend high. Looking for early sign of strength on breakout of tighter range in recent days.
Enter on breakout above four day high of $3.19 ($3.24).
Risk Management
Initial stop below support of tight range at $3.06.
Target Levels
Take-Profit 1: $3.86
Target includes convergence of two indicators
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Reward: $0.62
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R:R: 3.4x
Take-Profit 2: $4.15
Reaches second confluence zone.
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Reward: $0.91
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R:R: 5.1x
Trade Idea #2Wait for a possible deeper pullback to occur and subsequent bullish reversal setups on intraday time frames off potential key support areas. That would be around the 20-day MA at $2.87 currently, along with the small uptrend line. Further down is prior resistance at $2.51 along with the 50-day MA at $2.53 so far. Sentiment Rating & Signals
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