XRP (XRP) has bounced strongly against Bitcoin (BTC), rising about 30% since its “triple bottom” in July. A combination of fundamental and fractal indicators suggest that XRP is well positioned to continue its uptrend in the coming months.
XRP Price Recovery Reflects 500% Rally in 2021
The XRP/BTC trading pair has bounced more than 50% since forming a local bottom around 760 satoshis (1 satoshi = 0.00000001 BTC) in early June 2024. This low is significant because it closely aligns with the support level that preceded the 500% rally between January and May 2021.
During the 2021 rally, XRP/BTC encountered resistance at the 50-week exponential moving average (50-week EMA; red wave) and a pullback occurred before continuing the upward momentum. A similar pattern was seen in August 2024, when the pair tested the 50-week EMA and then was rejected.
This shows that traders are watching the 50-week EMA as a key level where selling pressure is intensifying. However, if XRP/BTC overcomes the wave resistance, it could signal a bullish trend towards the 200-week EMA (blue wave) at around 1,890 satoshis, similar to the 2021 upside target.
That means, if XRP/BTC successfully breaks above the 50-week EMA of around 1,120 satoshis, it could rally by around 100% by the end of 2024.
Fractals Further Strengthen XRP’s Bullish Outlook After Halving
Another bullish signal for XRP is that Bitcoin may be reaching a peak in market dominance, which usually happens after the halving.
For example, the Bitcoin Dominance Index (BTC.D) has fallen by more than 70% since the second halving in July 2016, showing that investors have shifted capital out of the BTC market and into altcoins like XRP.
However, XRP/BTC has underperformed since the third halving in May 2020, mainly due to investor confidence deteriorating following the U.S. Securities and Exchange Commission (SEC) filing a lawsuit against Ripple in December 2020.
Related: Crypto Analyst Suspects Bitcoin Dominance Will ‘Rise’ to 70% Again
As of August 2024, the SEC v. Ripple lawsuit has been settled, with Ripple having to pay a $125 million fine for illegally selling XRP to institutional investors. Since the ruling, XRP/BTC has risen by about 15%, suggesting further upside potential, especially if Bitcoin dominance follows the typical post-halving decline (by altcoins) following the recent halving in April 2024.
XRP appears to be under-bought compared to Bitcoin and Ethereum.
XRP appears to be severely underbought in US dollar terms compared to most major cryptocurrencies, including Bitcoin, as of 2024.
XRP/USD is down about 3.5% since the beginning of the year, compared to BTC/USD’s 37.80% gain over the same period. Other altcoins, including Ether (ETH), Solana (SOL), and BNB (BNB), have also outperformed XRP, rising 13%, 30%, and 84% in 2024, respectively.
XRP’s relative underperformance could suggest that it has room to catch up when market conditions become more favorable. Investors could see this as an opportunity for the XRP pair to rally, especially if the broader altcoin market continues to outperform.
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.