The price of XRP has dropped 14% from its swing high of $1.18 on October 16, tagging the downside trend line of the prevailing chart pattern. While Ripple (XRP) was on the verge of falling below $1, a key technical indicator suggests that the swing low may have set the temporary local bottom.
The XRP price prints a local low
On the 4-hour chart, the XRP price has been trapped within a descending parallel channel, as Ripple continues to record lower highs and lower lows. Despite the fact that the token is in a consolidation pattern, the Momentum Reversal Indicator (MRI) has flashed a bottom signal, indicating that it is poised for a move higher.
Ripple may oscillate between the upper and lower channel boundaries before revealing larger directional intentions, according to the technical pattern. Following the drop toward the chart pattern's downside trend line, XRP price would most likely target the topside trend line at $1.17.
The first barrier for the price of XRP is at the middle boundary of the current chart pattern at $1.09, which coincides with the 100 four-hour Simple Moving Average (SMA). Another stumbling block will be the 50 percent Fibonacci retracement level at $1.13, which is close to the 20 and 50 four-hour SMAs.
Additional lines of defense could appear at the 200 four-hour SMA at $1.04, followed by the ascending support trend line that has formed since July 20 at $1.03. Slicing below this multi-month foothold could spell trouble for the bulls, but the final leg of support will appear at the parallel channel's downside trend line at $1.01.
Until Ripple bulls can break above the governing technical pattern, the token may continue to fall until the XRP price reveals clear directional intentions.