The altcoin market relies heavily on the price action of the world’s largest cryptocurrency, Bitcoin, and such has been the case over the past few days. Since the start of August, XRP has been confined to a descending channel formation. However, the recent surge in Bitcoin’s price, one that enabled it to break the $11k-price level, may help XRP finally break out of the formation and rise on the charts.
At press time, XRP was being traded at $0.255 after having noted a 1.4 percent spike in trading value during the course of the past 24-hours. The coin had a market cap of $11 billion and registered a 24-hour trading volume of $2.1 billion.
XRP
Source: XRP/USD, TradingView
The descending channel formation has dictated the price action of XRP for over 2 months now. While the coin did come close to registering a breakout, the bulls haven’t been able to see this through. However, since 7 October, XRP seems to have started piggybacking on Bitcoin as it has posted impressive price hikes that may finally see a breakout attain fruition.
At the time of writing, XRP’s trading price was testing its immediate support at $0.258. If this level is breached and there is strong bullish sentiment for the coin, XRP’s trading price will be easily able to head to its next resistance point at $0.290, without much difficulty. However, if a price drop transpires, the coin has demonstrated the presence of key points of support that have all been previously tested at $0.24, $0.23, and $0.22.
Source: XRP/USD, TradingView
Both the technical indicators for XRP looked quite bullish and promising for the coin’s price. The MACD indicator had just undergone a bullish crossover and signaled that the price was likely to continue moving north-bound. The RSI indicator echoed a similar sentiment as it now found itself quite close to the overbought zone.
Source: CoinMetrics
XRP’s aspirations on the chart are going to be heavily tied to Bitcoin’s fortunes. Over the past year, the correlation with Bitcoin has risen from 0.21 to 0.89.
Conclusion
XRP’s breakout from the descending channel formation was extremely likely over the coming week, especially if the bullish momentum were to sustain itself. Since the coin enjoys a strong correlation with Bitcoin and the fact that Bitcoin has managed to maintain its position above $11k, there is a high possibility that XRP’s price is likely to head towards its second point of resistance at $0.290, while trying to breach it. However, if the coin were to remain within the formation, its immediate support is likely to stabilize the coin’s price.
