How XRP Investors Can Benefit From This “High Reward, Low Risk” Strategy

Disclaimer: The conclusions of the following analysis are the sole opinions of the author and should not be taken as investment advice.

While the market-wide bloodbath seemingly halted in the short term, XRP bulls finally got some breathing room to propel a short-term recovery onto the charts. XRP’s rebound from the $0.307 mark traced a three-week trendline support level (white, dotted) on the daily time frame.

Meanwhile, the buyers struggled to break through the immediate supply zone (green, rectangle) around the $0.37-$0.39 range. Only a close above this level could help the bulls continue their frenzy.

At press time, XRP was trading at $0.3773, down 3.25% in the past 24 hours.

XRP Daily Chart

Source: TradingView, XRP/USDT

After touching its multi-year low at the $0.33 level on June 18, XRP has been consolidating around the $0.307-$0.39 range for more than six weeks. With the supply zone controlling buying power, the altcoin marked a gradual recovery above its 20 EMA (red) and 50 EMA (cyan).

The previous double bottom structure added to the buying pressure which ultimately helped the alt retest the supply zone for the third time in over a month.

A rebound from the $0.38 support may position XRP for potential upside in the coming days. Should this rebound occur through higher trading volumes, the alt could aim to swing near the $0.42 area. Any dip below immediate support could trigger a possible return of trendline support.

Reasoning

Source: TradingView, XRP/USDT

The relative strength index (RSI) jump above the midline has increased the chances of a gradual rally on the charts.

On the other hand, the Chaikin Money Flow (CMF) marked lower peaks to imagine a rather bearish divergence. Traders/investors should look for a convincing break of trendline resistance before placing calls. Nevertheless, the OBV flipped its previous resistance level to immediate support and resonated with the buying advantage.

Conclusion

Given XRP’s close above the north-facing 20/50 EMA, the bulls would strive to breach the immediate supply zone. An inability of buyers to inflict a bullish crossover on the 20/50 EMA could prolong the compression phase before a volatile breakout. In both cases, the objectives would remain the same as those discussed.

Additionally, keeping an eye on Bitcoin’s movement and broader sentiment would be important in determining the chances of a bullish invalidation.