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XRP’s massive rally seen earlier this week appears to have simply been a flash in the pan, as the crypto has now retraced back below its key psychological resistance at $0.30, opening the gates for further short-term bearishness.
In spite of this, it is important to keep in mind that the token’s current signs of weakness is primarily rooted in the market-wide bearishness that was sparked by Bitcoin’s decline to below $10,000.
Once the dust settles from the recent market-wide drop, however, one top trader is noting that XRP could see a massive rally that leads it to climb nearly 100%, which could be fueled by growing technical strength.
XRP Plummets Below $0.30 as Bears Roar
At the time of writing, XRP is trading down 10% at its current price of $0.29, which marks a massive retrace from daily highs of nearly $0.33.
The cryptocurrency is currently in the process of shedding the majority of the gains that were incurred during its recent rally that led it to highs of nearly $0.36, with its inability to find stability around this price action spelling trouble for what comes next.
Nik Patel, a prominent trader, explained in a recent blog post that the token was able to break above a trendline resistance that was formed in June of 2019.
“Looking at XRP/USD on the Weekly timeframe, we can see that price broke out above trendline resistance from June 2019 a couple of weeks ago on strong volume, and has now found resistance at the prior swing-high at $0.36,” he explained.
In order for the crypto to rally past this resistance, it will likely require Bitcoin to see some further momentum.
Could Technical Strength Send the Crypto on a 100% Rally?
Patel also notes that he does believe XRP will ultimately see some significant upwards momentum, with his mid-term target existing at the crypto’s June 2019 highs at $0.56.
“Volume continues to rise and I am firmly of the belief that dips are for buying, with the ultimate target being the high at $0.56 from June 2019,” he noted.
He further goes on to explain that the crypto is currently consolidating above its 200-day moving average, and that a strong defense of its key defense at $0.27 could spark a short-term movement to over $0.36.
In order for this potentially highly bullish XRP rally to $0.56 to occur in the coming weeks and months, it is imperative that Bitcoin also sees some notable short-term upside.
Featured image from Shutterstock.
