One of the more interesting movements we have witnessed in recent months was just executed by XRP: a sharp rejection almost immediately after an abrupt aggressive push up to $2.30. If you zoom out and examine the structure, you will see that there is actually a lot to be hopeful about, even though this classic fakeout initially appears to be the beginning of yet another cascade of capitulation.
First, let's be honest: since April, XRP has been trapped in an agonizingly narrow range, consolidating above the $2.00-$2.10 support zone and failed to regain the 100-day and 200-day EMAs on multiple occasions. XRP finally broke above all three of the major moving averages this week - the 50, 100 and 200 EMAs - for a brief period of time before reversing course and falling back under resistance.
Even though it is disheartening, the rejection validates one crucial point: there is still a sizable demand that is just waiting for a reason to reappear. The idea that the $2.30 fakeout involved more than just thin liquidity manipulation is further supported by the volume spike that accompanied this move.
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The fact that XRP was able to momentarily break through such a well-established resistance band shows that buyers were once again interested in the market. In terms of momentum, the RSI's breakout into the mid-50s was a significant improvement over the neutral to bearish readings that prevailed for the majority of June.
Above the 200-day EMA, which has served as a structural floor for the past few months, price action is still well-supported. In essence, the fakeout to $2.30 may be the prelude to a real breakout. What does this all mean? By clearing out weak hands, these unsuccessful attempts frequently pave the way for a longer rally when new bids are received.
The conclusion is that there are still bulls in XRP who are ready to take supply, which suggests that the sideways channel might not last for very long. Care should be taken until a clear move above $2.30 remains. Although frustrating, this fakeout also shows that a real reversal is still possible and that XRP is still alive.
