Imagine a ship caught in a fierce storm, battered by heavy waves, swaying violently, yet remaining afloat. This indicates that resilience still exists despite the turmoil, suggesting that sailing will be smooth once the storm passes.
Similarly, when the price of an asset refuses to decline despite bearish signals from major indicators, it suggests underlying strength and the potential for a market rise.
This is the current situation in the $XRP market
, reflecting Bitcoin market conditions that foreshadowed a historic rise in Bitcoin's price from $70,000 to $100,000 late last year. Let's take a look at both.
$XRP is the payment-focused cryptocurrency used by fintech company Ripple to facilitate cross-border transactions. However, the two are not substitutes.
XRP challenges the bearish MACD indicator
The underlying strength of #XRP is evident in recent price behavior compared to the MACD indicator.
The MACD indicator is an exponential moving average (EMA) that focuses on trend tracking and is widely followed by both institutions and individual investors to determine price trends and measure momentum.
The crossover of MACD bars from negative to positive indicates a bullish momentum shift, suggesting the beginning of an upward trend in the asset's price. A crossover below zero indicates the opposite, as consecutive deep bars indicate reinforcing bearish momentum.
The MACD indicator, used by traders to measure long-term trends, broke below zero in the first week of March, indicating a renewed bearish trend.
However, a clear downward trend has not yet materialized, as prices primarily trade back and forth between $2 and $2.60, except for occasional short-term dips below $2.
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XRP's weekly chart shows the price-MACD divergence
The divergence, characterized by a consistently declining MACD indicator and largely directionless trading, suggests an underlying bullish sentiment or resilience - where bulls have managed to absorb the supply.
This prolonged divergence means the potential for a sudden resurgence in price increases. The upward-sloping simple moving averages (SMA) of 50, 100, and 200 weeks support this possibility.
Bitcoin challenged the bearish MACD indicator in 2024
The aforementioned divergence in XRP resembles Bitcoin's conditions last year when the weekly MACD indicator continued flashing red throughout the summer. At the same time, Bitcoin traded within a defined price range, except for occasional short-term dips below $60,000.
CoinDesk noted the divergence in mid-September of last year when Bitcoin traded at around $59,000. Weeks later, the price of Bitcoin rose to $70,000, eventually surpassing it in November, recording its all-time highs above $100,000.
Let's see if XRP will follow the same path.
BTC's 2024 price-MACD setup
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