An analyst now highlights potential profit-taking area for XRP after its recent surge experiencing a potential breakout.
Market analyst Arthur has pinpointed a new profit-taking zone for XRP following a significant price increase of nearly 10% over the weekend, coupled with a subsequent pullback.
Weekend Rally and Retesting Resistance
On Saturday, January 11, XRP made headlines with a remarkable rally that pushed its price close to the $2.60 resistance level, a milestone it hadn’t reached in over a month.
This surge captured the attention of traders and investors alike, igniting hopes for a sustained upward trend.
The Pullback: What Comes Next?
However, shortly after this impressive gain, the upward momentum faced a pullback, leaving many market participants uncertain about the future direction of XRP.
Arthur, a well-respected market analyst, shared his insights on this breakout and the ensuing pullback, as well as potential future movements for XRP.
Bullish Breakout from Symmetrical Triangle
Arthur characterized the weekend rally as a bullish breakout from a symmetrical triangle pattern observed on the daily chart.
Such patterns are often precursors to significant price movements, and XRP’s breakout aligns with increasing momentum and trading volume.
Despite this promising setup, Arthur emphasized the importance of confirming the uptrend before investors fully commit.
He suggested that confirmation could come from price stability above key support levels.
Volume Trends During the Pullback
Arthur also noted the trading volume during the pullback.
Although volume increased, it did not reach extraordinary levels, indicating a degree of hesitation among sellers.
The current pullback has similarly shown low trading volume, which may suggest that this is a temporary correction rather than the beginning of a bearish trend.
This perspective lends credence to the idea that XRP could continue its upward trajectory once the market absorbs its recent gains.
Rising Open Interest and RSI Insights
Arthur also highlighted the relative strength index (RSI), which currently sits at 59.72.
This indicates a moderate bullish sentiment, remaining below the overbought threshold of 70, thereby suggesting there is still room for further price appreciation.
Key Levels for Traders to Watch
Arthur outlined several critical levels that traders should keep an eye on.
On the downside, the $2.50 mark serves as a crucial support level, having been the previous resistance before the breakout.
If this level does not hold, deeper support zones at $2.20 and $1.80 may come into play.
On the upside, the next significant resistance target is $2.80, followed by the psychologically important $3.00 mark.
Arthur noted that these levels could act as profit-taking zones for investors looking to capitalize on their gains.
Potential Scenarios for XRP’s Direction
Arthur presented two potential scenarios for XRP’s near-term direction.
If the asset successfully retests $2.50 as support while maintaining momentum, it could rally toward $2.80 or even reach $3.00.
Conversely, if selling pressure intensifies and XRP falls back into the symmetrical triangle, it may retrace to $2.20 or $1.80.
In either case, Arthur stressed the importance of monitoring trading volume.
The Role of Liquidity Zones
Additionally, Arthur discussed the significance of liquidity zones—areas where substantial trading activity occurs.
He identified an upper liquidity zone between $2.80 and $3.00, where many short sellers may have placed stop-loss orders.
Breaching these levels could trigger additional buying pressure, pushing prices higher.
Conversely, the lower liquidity zone between $2.20 and $1.80 could attract accumulation if prices dip, setting the stage for a potential rebound.
Optimism Amid Pullback
Despite the recent pullback, Arthur maintains an optimistic outlook.
The rally demonstrated strong bullish momentum, but confirmation at key levels remains essential for sustained growth.
As of now, XRP trades at $2.54.
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