XRP's Breakout Fails

XRP has dropped back below the 1-year downtrend line it broke last week. In the last post I said a weekly close below 1.52 would mean it had just poked above the line and fallen back, and last week's close came in below that.

The chart above shows that it cleared the downtrend line running from last fall's high early last week, but it's now back below that line. The highs have also come in lower twice in a row, forming a double top, and the low between the two peaks is around 1.45.

Several technical factors converge at this level. It's exactly the 50% retracement of the move from this month's mid-month low to last week's high, and it's also where the neckline of a small inverse head and shoulders and long liquidations are clustered.

Flows favor sellers. Splitting trades by order size, mid-size orders have been net sellers throughout, and futures open interest hasn't grown. With BTC testing the bottom of its range, it's not an easy market for XRP to hold up on its own either.

The chart below shows that the rising line that held the lows all last week also broke yesterday. The short-term MAs are now sitting above price.

- Key resistance 1.54–1.56
- Key support 1.45–1.46
- Next support 1.40–1.41

This week I think it's more likely to give up 1.45 and slide to the next support. That level is where the 61.8% retracement overlaps with the center of the nearly three-month volume profile. Conversely, a daily close above 1.55 invalidates the bearish view and would put it back above the downtrend line.

Since it's slipped back below a line we were glad to see break, this week I'm leaning toward it losing the low between the two peaks and stepping down one more level.