XRP is witnessing a bearish divergence on the daily timeframe, but crypto analyst JD has identified a crucial buy opportunity should the bearishness persist.
JD’s latest XRP analysis highlights a prevailing bearish divergence that has plagued the asset on the daily chart. A bearish divergence occurs when an asset’s price records higher highs while its crucial momentum indicators witness lower highs.
In XRP’s case, the bearish divergence can be found with the recent performances of critical metrics such as the daily Relative Strength Index (RSI), the daily Stoch RSI, and the daily Moving Average Convergence Divergence (MACD). These significant indicators are observing lower highs.
XRP’s Rising Wedge
While these metrics have registered lower highs, XRP’s price has witnessed higher highs. This phenomenon has resulted in the formation of the bearish divergence.
Notably, another remarkable thing on the chart is that, as XRP records these higher highs, the asset has formed a rising wedge that it has traded within since Sept. 4. JD called attention to the significance of this rising wedge as a drop below or a rise above it could determine XRP’s next direction.
XRP registered a fakeout on Sept. 28 when it dropped to a low of $0.4952, slipping underneath the wedge. This fakeout helped to filter out indecisive traders and eliminate longs in the market. However, the chart did not confirm a break below the rising wedge, as XRP bounced back.
XRP has now formed another daily candle underneath the rising wedge. JD expressed uncertainty if this is another fakeout similar to the one on Sept. 28. According to him, a massive green candle at this position could help negate the bearish divergence XRP currently faces and take the asset back within the wedge.
XRP Buying Opportunity
Nonetheless, if this green candle does not materialize, JD predicts further XRP drops below the wedge. However, he sees these drops as an opportunity to amass more XRP tokens at a discount. According to him, most traders will fail to seize this opportunity.
JD’s sentiments suggest that he expects an XRP recovery if the asset records further decline. Despite this sentiment, the analyst projected no price target for the asset. While JD remains optimistic, it is imperative to enter the market cautiously.
XRP has forfeited the $0.50 price territory amid the current downturn plaguing the broader market. The asset is trading for $0.4981 at the time of reporting, down 4% over the past 24 hours.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
