Coindesk’s Omkar Godbole suggests, “XRP is teasing a long-term bullish reversal, with a surge in price and a bullish chart pattern likely to occur next week.”
Ripple Lab’s XRP is the third biggest cryptocurrency by market cap and its price has achieved a 27% increase since 1st May. Moreover, if prices stay above the current level till May 31, the resulting monthly gain would be the biggest since September 2018. Back then it surged by 73%, going from $0.3350 to $0.5820.
Although its gains are currently more modest, “it may produce much bigger gains in the following months as a widely tracked long-term technical indicator is about to turn bullish,” Godbole says.
That technical indicator is the 50-day moving average (MA) and XRP looks poised to cross the 200-day MA, possibly this week. Doing this would mark a “golden crossover”, a pattern that indicates long-term bullish reversal, according to technical analysis theory.
However, not everyone is swayed by an MA analysis as some experts say it is a “lagging indicator,” because the MA studies are based on historical data. That said, XRP is still down 87 percent from the record of $3.30 reached on Jan. 4, 2018 and far from being overbought.
Godbole reports that XRP’s 50-day MA is fast approaching the 200-day MA and that, “The crossover confirmation could be followed by a convincing break above the recent high of $0.4787 as the 14-day relative strength index (RSI) is currently biased bullish at 61.00 and well short of the overbought territory (above-70).”
Another indicator, the Chaikin money flow index (CMF) is printing positive, indicating strong buying pressure. Furthermore, “XRP jumped 34 percent in seven days to May 19, validating seller exhaustion seen near $0.28 in the first 4.5-months,” as Godbole reports.
The thing to look out for if you’re an XRP holder is a possible bear trend, and this would become apparent if XRP’s price ends up below $0.3593 at the end of Sunday coming.