XRP Attemtps Recovery After Ending Year in Red
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- XRP has a bearish short and medium-term trading bias
- The four-hour time frame shows that a bullish inverted head and shoulders pattern may be forming
- The daily time frame shows that a bearish wedge breakout remains in play
XRP is attempting to recover towards the $.20 level, after the third-largest cryptocurrency by market capitalization slipped to its weakest trading level since Dec 18 earlier this week.
The cryptocurrency finished December with a loss of 13% and ended the year in negative territory by around 45%.
A key theme during 2019 for XRP has been the inability of cryptocurrencies to hold onto gains as traders sell upside rallies.
Technical analysis highlights that XRP will need to stabilize above the $0.28 level in 2020 in order to encourage the notion that the bearish trend is over and that a new bullish trend is beginning.
From current levels, the XRP pair would need to stage a rally of around 45% to reclaim its 200-day moving average, and turn technically bullish.
The four-hour time frame shows that XRP will need to rally above the $0.20 level to turn technically bullish over the short-term.
Furthermore, XRP will need to rally by a further 20% to form a bullish reversal pattern on the lower time frames.
The size of the pattern suggests that the XRP could rally towards the $0.28 level if bulls can move price above the $0.23 level.
The daily time frame highlights the importance of the $0.17 level, as it currently acts as critical technical support. A loss of this area could spark a major XRP sell-off.
Technical indicators are showing bullish potential in the short-term, with the Relative Strength Index forming an inverted head and shoulders pattern.
The four-hour time frame shows that key technical resistance is now located at the $0.20 and $0.23.
Key technical resistance over the medium-term is located at the $0.28 and $0.38 levels.
The four-hour time frame is showing that the XRP pair has strong long-term technical support around the $0.18 and $0.17 levels.
A loss of the $0.17 level could spark a major decline in XRP towards the $0.15 level.
XRP needs to hold above the $0.20 level in order to secure buying interest towards the $0.23 level. Overall, a rally towards the $0.28 level appears to be possible if buyers can eventually rally the cryptocurrency towards the $0.28 level.