Will XRP Break Out From Its Two-Year Downward Trend? [Premium Analysis]

XRP Highlights

• The XRP price has been following a descending resistance line for 644 days.
• There is significant support at $0.2
• The price has completed a five-wave Elliott Formation.
• It is likely in the process of completing the C-wave of an A-B-C correction.
• The likeliest area for a reversal is found at $0.21-$0.215.

Cryptocurrency trader @CredibleCrypto states that he believes XRP will initiate another downward leg before it resumes its upward movement. He gives a target of $0.21 as the likeliest reversal area.

XRP/USD wants one more leg lower imo. .21 on the way and it has to hold for a continued bullish push. I expect it to. $XRP pic.twitter.com/S2PA4fcwKd

— CrediBULL Crypto (@CredibleCrypto) January 23, 2020

Let’s take a closer look at the XRP price and attempt to outline its future movement.

Resistance Line

The XRP price has been following a descending resistance line since April 2018. Since April 2019, it began following a descending support line, creating a descending wedge in the process. Once the price reached the $0.2 support area, it began an upward move and has almost reached the resistance line. This area was the catalyst of the 2017 upward move that lead to an all-time high of $3.31 on January 4, 2018. However, there is no bullish divergence in the RSI to forecast a price breakout. Therefore, it is possible that the price revisits the $0.2 support area or even heads lower.

Elliott Formation

Beginning on January 3 with a low of $0.184, the XRP price began an upward move that transpired over five waves; three upward and two downward. Once it reached a high of $0.254 on January 18, the RSI generated bearish divergence. The weakness was confirmed when the RSI completed a failure swing top and validated the RSI support line as resistance. The price has been decreasing since. A very common correction pattern after such an increase would be an A-B-C correction. Based on the current movement, the price is in the process of completing the C wave. The likeliest place for it to do so would be near $0.21, between the 0.5-0.618 fib levels and also the previous breakdown level. Thus, we agree with the hypothesis laid out in the tweet. This movement is also supported by the breakdown of the parabola and the 100-day moving average (MA) resistance. If the price follows the possible descending support line in place, it would get to our support area by January 26. To conclude, the XRP price failed to break out above a long-term resistance line and has been decreasing since January 18. We believe it is likely to reach $0.21. The presence of reversal signs once it gets there will determine whether the price makes another attempt at breaking out or falls to new lows instead.