Daily Technical Analysis of XRP: A Bullish Perspective Amid Bearish Signals

This is a daily technical analysis by CoinDesk analyst and Chartered Market Technician Omkar Godbole.

Picture a ship caught in a fierce storm, drenched by cascading waves and swaying wildly, yet remarkably staying afloat. This imagery reflects resilience amidst turmoil, hinting that peaceful waters will once again emerge once the tempest subsides.

In the financial markets, a parallel can be drawn: when an asset’s price remains steady despite bearish signals from critical indicators, it suggests an underlying strength that may lead to a bullish uptrend. Currently, this is the situation in the XRP market—echoing the conditions previously observed in Bitcoin that preceded its historic surge from $70,000 to $100,000 late last year.

XRP is the cryptocurrency developed by the fintech company Ripple, designed to enhance the efficiency of cross-border transactions. While XRP and Ripple are fundamentally interconnected, they are not synonymous.

XRP Defies Bearish MACD Histogram

The underlying strength of XRP is underscored by its recent price movements in relation to the Moving Average Convergence Divergence (MACD) histogram. This well-regarded exponential moving average-based trend-following indicator is a favorite among both institutional and retail investors for identifying price trends and gauging trend momentum.

A bullish shift in momentum is indicated when the MACD histogram changes from negative to positive, signaling a potential uptrend for the asset’s price. Conversely, a crossover below zero signifies bearish momentum, with prolonged negative bars suggesting enhanced downward pressure.

In the first week of March, XRP’s weekly MACD crossed below zero, suggesting a renewed downtrend. However, contrary to expectations, XRP has resisted a significant downturn, mostly oscillating within the range of $2 to $2.60, with only sporadic short-lived dips below $2.

A divergence emerges in XRP’s data—the ongoing bearish MACD coupled with largely stagnant price movement hints at a hidden bullish momentum, indicating that buyers are effectively absorbing supply despite bearish sentiment. Such a prolonged divergence could lead to sudden upward price movements, with the case for bullish momentum strengthened by the upward trajectory of the 50-, 100-, and 200-week simple moving averages (SMA).

BTC Defied Bearish MACD in 2024

The divergence currently exhibited by XRP is reminiscent of the conditions in Bitcoin observed last year. During the summer of 2023, the weekly MACD for BTC consistently displayed bearish signals while the price oscillated within a range, with few fleeting dips below $60,000.

CoinDesk noted this divergence back in mid-September of last year when BTC was trading around $59,000. Just a few weeks afterwards, BTC surged to $70,000, ultimately reaching record highs above $100,000 in November.

Exploring the Current Market Conditions

With XRP’s current trajectory and the historical parallels with Bitcoin’s past performance, the cryptocurrency community is left questioning whether XRP might mirror this path toward substantial gains. As market participants watch keenly, indicators continue to suggest that an underlying strength persists even amid the prevailing turbulence.

Indicators remain critical in guiding traders’ sentiments, and the resilience witnessed in XRP suggests that amid the storm, crypto enthusiasts may just be navigating toward calmer seas and potentially prosperous waters ahead.