Hi friends! Let's get right to it! Looking at the four hour XRP chart, you can see a common theme, that is presenting itself in most of the crypto space — an inverse head and shoulders pattern. This one is interesting. You can see that I have two targets up on the board. The reason for this, is actually because of the slope of the neckline, which is steep and negative. Necklines of inverse head and shoulders patterns that slope down are not as bullish as those that slope up. This is why I have a low target, and then a high target. The first target is at the 61.8% retrace, at about 1.40, and the second target is all the way up at the 50% retrace, at about 1.76.
Looking at the most recent price action you can see that XRP held the 78.6% retrace like an absolute beast. It tested it on many different occasions, and each time held. That left XRP with no choice but to head higher, which it's currently doing. Now, we can use the 78.6% retrace as a line in the sand. For educational purposes, if you wanted to be aggressive and go long here, you could place a stop slightly below the 786, and that would be a really nice trade entry. You can see that XRP has broken above the 50 EMA (in orange) and is now heading up to test the 200 EMA (in purple.) Volume is picking up slightly, and the MACD is crossing over the zero line, which is a technical buy signal.
If you look inside of the head, at the last time XRP crossed over the 50 EMA , you can see that a nice rally ensued. Perhaps, we will get a similar rally, particularly if XRP makes it's way above the 200 EMA and the neckline resistance.
Overall, XRP appears to have bottomed with many other assets in the crypto space, and we appear to be gearing up for a move higher. For now, let's watch for the breakout above the neckline resistance, and keep an eye on the support at the 786.
