XRP will be heading towards $1 in the short-term
XRP price hit a key support level for the third time yesterday, further enhancing its accumulation phase. Viewed individually, this accumulation appears inconspicuous. However, when combined with recent price action, it has the properties of a fractal.
Fractals and their effects
The price of XRP entered an accumulation phase from January 21st to February 5th, a period during which the asset moved sideways with little or no movement. During this time, the trading volume starts to decrease and falls below the 100 moving average.
During this time, XRP broke out, sending the price up 40% to $0.915. The altcoin then fell about 17% and established a 4-hour demand zone that lasted from $0.74 to $0.77.
XRP price chart | Source: TradingView
Its price has tripled this barrier since the creation of this area, suggesting that this is another zone of consolidation. The volume has also dropped when the price hits this area, suggesting it is a fractal.
Therefore, investors can benefit from the breakout movement that has emerged from this accumulation. As with the previous move, the price of XRP is likely to explode and break the immediate resistance at $0.91 and approach the psychological level of $1.
Despite the high volatility and bears pushing the market lower, XRP managed to remain reasonably stable and continued to accumulate with the blue pennant. The price continues to trade between the $0.7 support and the $0.96 resistance area.
Trading volume is currently constant with an even distribution between buyers and sellers. But this delicate balance could soon be upset.
Supporting the bullish outlook is the fact that the 365-day MVRV indicator is currently hovering around 14%, indicating that many short-term holders who bought XRP over the past year are selling at a loss.
This on-chain indicator is used to determine the average profit/loss of investors, so it can be used to determine that this is an opportunity zone that long-term holders are likely to jump into. Accumulate XRP at a discount.
MVRV On-Chain Indicator | Source: Santiment
Now both technical indicators and on-chain metrics are flashing bullish. However, a surge in selling pressure during Bitcoin’s crash could dampen bullish momentum.
A four-hour candle close below the $0.74 zone will create a lower low, suggesting that XRP is likely to fall and retest the $0.68 support area. Here, buyers can accumulate XRP at a discount and create another uptrend.
Above that, the $0.68 – $0.65 area is a steady support. A further sinking of this zone seems unlikely. Therefore, the forming uptrend for XRP is key to retest the psychological $1 level.
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