Can XRP Price Hit $1 After Rising 25% In A Week? Watch out for this key support level

XRP price continues to rebound after falling more than 70% in the April 2021-January 2022 correction.

Why the XRP/USD 50-week EMA is key?

On February 13, XRP/USD traded as high as $0.916, above the 50-week exponential moving average (50-week EMA; red wave) near $0.833. The uptrend, while not definitive, opens up the possibility of further bullish momentum, largely due to historical buying sentiment surrounding the aforementioned waves.

For example, in the week ending July 27, 2020, traders managed to reclaim the 50-week moving average as support, whereas more than a year ago they used volatility as resistance. Later, the price of XRP rose by more than 820% in April 2021 to $1.98, the highest level in more than three years.

Conversely, during the bearish cycle from 2018 to 2020, XRP’s 50-week moving average has acted as a strong resistance multiple times. This suggests that this wave is able to withstand bullish recovery sentiment, such as has been witnessed during the current price rally.

Can XRP Reclaim $1?

XRP now needs to hold decisively above its 50-week moving average, which could allow it to reclaim $1 in the coming sessions.

This level is about 25% higher than current price levels and is in line with two key resistance targets for XRP. The first is a downward sloping trendline that has lasted for several months since April 2021, which limits the coin's upward bias.

Meanwhile, the second target is the 0.382 Fibonacci Retracement level between the $2.70 high and $0.10 low, which also has a history of limiting XRP’s strong trend, acting as both support and resistance.

XRP is still at lower highs, and the $1 level is not a guarantee that XRP will come out of its corrective tendencies. On the contrary, this may present an opportunity for traders to secure medium-term profits, so according to the Fibonacci retracement chart, XRP may fall back towards the upcoming support target at $0.71.

bearish case

Conversely, failing to gain a decisive close above the 50-week EMA resistance, XRP could pull back towards the 200-week EMA (blue wave) at $0.54.

The move could trap prices in a range with the 50-week moving average as resistance and the 200-week moving average as support, which could lead to a further breakout to the downside. As the chart below shows, the bearish outlook emerged in the fractal between June 2018 and June 2019.

Notably, XRP’s rise to a record $3.55 in January 2018 coincided with its weekly relative strength index (RSI) forming lower highs, thus confirming a bearish divergence.

Later, the price fell below the 50-week SMA but found support from the 200-week SMA. The RSI's decline is also exhausted near 37, just above its oversold reading of 30.

XRP is trading sideways within the range of the aforementioned moving averages, while the RSI is sustaining above 37. Nonetheless, in June 2019, the price fell below the 200-day moving average support and fell to a low of $0.10 by March 2020.

If the fractal behaves like it did in 2018-2019, XRP will likely fall below the 200-week moving average support near $0.54 in the coming sessions. According to the Fibonacci retracement curve chart from the $0.14 low to $1.52, such a move could shift XRP’s medium-term downside target to the 0.786 Fibonacci line around $0.43.

Meanwhile, a further break below $0.43 would put the next downside target at $0.22, a level that has historically been actively traded.