XRP might be in for a big rally as it forms a double bottom reversal pattern on its 4-hour chart. Price has yet to test and break past the neckline around the 0.3300 mark to confirm that an uptrend is due.
The 100 SMA is still below the longer-term 200 SMA to suggest that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. Price is above the 100 SMA, though, so this might keep holding as dynamic support.
A break past the 200 SMA dynamic inflection point could add confirmation that bulls are regaining control. The gap between the moving averages is slowly narrowing to reflect a potential turnaround soon.
However, RSI is still heading south so XRP might follow suit while sellers have the upper hand. Stochastic is also on its way down to signal bearish momentum, but the oscillator is nearing the oversold region to reflect exhaustion.
The recent pop higher is being attributed to a combination of low volumes during last week’s Chinese New Year holidays and the Japanese bank holiday today. This has revived bullish forecasts from a number of analysts, likely keeping some bullish momentum in play for a bit longer.
In particular, upside forecasts for bitcoin possibly reaching $5,000 in the next 10 days are drawing buyers back to the mix, even for other digital assets. Sustained momentum could indicate that optimism is back for good and that buyers are no longer as careful about quickly booking profits as they used to be.
On the other hand, nearby resistance levels holding and spurring dips might remind market watchers that selling has been usually more accelerated compared to any rallies lately.