The Ripple (XRP) price fell sharply on April 19 after a crucial resistance area rejected it.
Despite the fall, the wave count offers hope for a potential reversal as long as the price reaches a bottom soon. Will XRP be able to recover its bullish structure?
Ripple Price Struggles With Resistance
The XRP price has increased since breaking out from a descending resistance line on March 21. The breakout from the line suggested that the previous correction had ended. It led to a new yearly high of $0.585 on March 29.
Initially, the price seemed to have cleared the $0.530 resistance area. However, XRP created a long upper wick and fell. The wick is considered a sign of weakness. It means buyers could not sustain the price, and sellers took over, driving it down. A similar wick on April 14 (red icon) supports this possibility. So, the $0.530 area now acts as resistance again.
Moreover, the digital asset is in the process of creating a bearish engulfing candlestick. This is a type of bearish candlestick in which the entire previous increase is negated in one day. It aligns with the previous bearish readings regarding the long upper wicks.
XRP Price Prediction: How Can the Price Recover?
The technical analysis from the short-term six-hour count offers a bullish XRP price forecast. The main reason for this is the wave count. Elliott Wave theory is a tool used by technical analysts. It looks for recurring long-term price patterns and investor psychology in order to determine the trend’s direction.
According to it, it appears that the current price is in the fourth wave of a five-wave increase (white). This is a positive indication for XRP’s future price, suggesting that it could potentially surpass the $0.525 resistance are and reach $0.650.
The fourth wave’s price movement will determine the future trend’s direction. At present, the most likely pattern for completing the corrective wave is a bounce at the 0.5 Fib retracement support level.
Fibonacci retracement levels hypothesize that after a large price move in one direction, the price will retrace partially to a previous price level, before resuming in the original direction. They can also be used to determine the top of future upward movements.
So, if the bullish XRP price prediction materializes, the Ripple price could increase to the $0.650 resistance area. Besides being a horizontal resistance area, it is also the 1.61 Fib of wave four (black). Due to this confluence, the area will likely act as the top.
However, a decrease below the wave one high at $0.433 (red line) would invalidate this bullish wave count. In that case, the XRP price could fall down to the $0.37 horizontal support area.
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