Disclaimer: The findings of the following analysis are the sole views of the author and should not be considered investment advice.
XRP saw a transient range-bound swing in the $0.307-$0.367 zone that lasted nearly seven weeks. However, the altcoin’s gradual increase in buying pressure led to an upside break of the $0.36 support. This development implied an ascending channel on the daily time frame.
Meanwhile, buyers had yet to find a convincing close beyond the supply zone (green, rectangle) to create a strong bullish narrative. A close above this level could help buyers continue their spree.
At press time, XRP was trading at $0.3775, up 1.96% in the last 24 hours.
XRP Daily Chart
The alt tested the multi-year support range of $0.307-$0.309 several times in the last month. However, buyers had their footing to lay the foundations for impressive growth over three weeks.
While the supply zone was limiting buying power, the altcoin rallied above the 20 EMA (red) and 50 EMA (blue). The current uptrend of the channel has prompted a test of this support zone several times. Bulls may take advantage of weakness in this zone, especially with a bullish flag setup finding support near its EMAs.
The recovery from the $0.36 support level has XRP testing the $0.408 zone. A close beyond the supply zone could trigger a short-term market advantage. To top it off, bullish flag setups are generally more effective in a downtrend in volume. In the case of XRP, volumes were in a bearish trend during the flag setting.
Relative Strength Index (RSI) comfortable position above 54 support could work in favor of buyers in the coming sessions.
Also, Chaikin Money Flow (CMF) made lower highs to depict a rather bullish divergence with price. Immediate trendline support could reignite a surge in buying volume. Moreover, the MACD lines maintained their bullish stance while swinging above zero.
Given XRP’s bullish move to the $0.36 support alongside the bullish flag setup and CMF divergence, buyers would aim to continue the incremental growth on the charts.
An inability of buyers to trigger a bullish crossover at the 20/50 EMA could extend the compression phase before a volatile break. In any case, the objectives will remain the same as discussed.
Also, watching Bitcoin’s movement and broader sentiment would be important to determine the chances of an upside reversal.