Ripple (XRP) has staged a surprising comeback and is up nearly 10% for the day while the rest of the market continues to see a slowdown. The cryptocurrency is now close to breaking out of the months long symmetrical triangle that it has been trading in. However, given the outlook of the cryptocurrency market, we might see the price break to the downside. This recent rise in XRP/USD has been seen after more than ten weeks of consolidation. The weekly chart for XRP/USD shows that the price is now above the 21 Week EMA. If it closes the week above this level, we might be able to see a bullish continuation and the price could continue to rise in the weeks ahead.
On the other hand, if it retraces like it did the day before and closes below the 21 Week EMA, it would be easier for the price to break below the symmetrical triangle. The Stochastic RSI on the daily time frame shows a hidden bearish divergence that could lead to continued decline in the weeks ahead if Bitcoin (BTC) and the rest of the market decline. Weekly trading volume remains low and the price action is expected to be choppy till we see a strong breakout to either side of the triangle. It is important to note though that even if the price breaks above the symmetrical triangle, it is likely to be stopped by the 50 week EMA which is a very strong resistance level and the price might end up falling back into the symmetrical triangle to eventually break below it. Ripple (XRP) has lagged behind while most cryptocurrencies rallied on positive price action since the beginning of the year.
The weekly chart for XRP/BTC shows that Ripple (XRP) is even closer to breaking out of the symmetrical triangle it has been trading in against Bitcoin (BTC). This triangle goes back to November, 2017 and the Stochastic RSI for XRP/BTC is the lowest it has ever been. This means that Ripple (XRP) has a very strong probability of preserving its gains against Bitcoin (BTC) during the next decline. The symmetrical triangle that goes back more than a year has higher odds of being broken to the upside than downside given that XRP/BTC is extremely oversold on the weekly time frame.
Ripple (XRP) has a history of making independent moves during critical times in the market. Its technicals at the moment are primed for such an independent move that could see Ripple (XRP) rising or at least holding its ground when the market declines. It is important to note that Ripple (XRP) defended against a full-fledged correction when cryptocurrencies declined during 2018. It did complete its correction but we have seen it holding its ground as the market declined. The exact same scenario has very high odds of happening this time which is why Ripple (XRP) might be a good hedge against Bitcoin (BTC). That being said, Ripple (XRP) is currently trading below both its 21 week EMA and 50 week EMA and will have a very hard time breaking out against Bitcoin (BTC).