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- XRP tests a crucial resistance level; a close above it could signal continued upward momentum with $2.75 as the next target.
- A potential Bull Trap could form as XRP rises, tempting traders to buy before a possible price reversal leads to losses.
- A correction may start in mid-March, marking the end of Wave 2 in the Elliott Wave cycle, followed by a potential Wave 3 rally.
XRP has been quite bullish over the last week and is now at a test of a crucial resistance level. Egrag noted that bulls are struggling to regain above the apex level of Ascending Triangle set on the 12-hour timeframe. If XRP will be able to close above this level, there might be a continuation of the up move with $2.75 being the next big level on the radar. Hitting this price level would offer a very clear signal confirming the longs’ control of the market.
XRP Price Surge or Reversal?
In the event that the price pierces through $2.75, some of the resistance levels that will confirm the bullish run are $3.20. However, there are concerns about a possible formation of a Bull Trap. A Bull Trap is characterized by a price surge that looks like the price is set to increase and as a result entice traders to buy the asset, only for the price to fall back down. This may result in losses to the traders who likely to see the idea of an uptrend persisting.
As March looms, Egrag expected his trading signal to recommend a correction at the middle of the month of March. This correction thus marked the end of what is referred to as Wave 2 in the Elliott wave cycle which is usually followed by a pull back.
After the correction, there could be the start of the Wave 3, which is the next wave according to Elliott’s rules, meaning there could be another upward movement. The price of XRP, at the time of writing is $2.69, an upward movement of 4.38% in over the past 24 hours.
Source: TradingView
Mixed Technical Outlook
There is a good sign that holds that a correction is due but there is still the possibility to continue the uptrend. If Wave 3 follows as expected, that will mean a considerable rise in the market as indicated in the figure below. Nevertheless, traders should now refrain from getting too excited as relying on further upward movement can be potentially volatile until the next wave of rally begins.
The technical outlook for XRP is somewhat mixed as there are both positive and negative signs for the future price performance of the coin. The key point level which traders will have to consider are $2.75 and $3.20 as these may serve as the factors that will decide on the trend. However, a Bull Trap and a correction are always around the corner; therefore, therefore, it is essential to be cautious and ready for any changes on the market.
