XRP's Bullish Breakout: A Beacon of Hope for Bitcoin?

Recently, XRP has made a significant stride, setting a positive precedent for Bitcoin, the market leader.

According to a CoinDesk report published on 20 July 2023, XRP, a digital asset primarily used for payments, has seen a huge surge in the past week, marking its best performance since August 2021. This surge has apparently propelled XRP prices above a key technical analysis indicator known as the “Ichimoku Cloud” on the weekly chart, signaling a bullish breakout. However, Bitcoin has yet to replicate this achievement.

The Ichimoku Cloud, also known as Ichimoku Kinko Hyo, is a popular technical analysis tool that offers a comprehensive view of a financial asset’s price action. It consists of five lines, each providing unique information about the price action:

1. Tenkan-sen (Conversion Line): This line is the midpoint of the highest and lowest prices over the last nine periods. It’s a faster-moving line that can signal potential trend changes.
2. Kijun-sen (Base Line): This line is the midpoint of the highest and lowest prices over the last 26 periods. It’s slower-moving and can act as a trigger line for buy or sell signals when crossed by the Conversion Line.
3. Senkou Span A (Leading Span A): This line is the midpoint of the Conversion and Base Line, plotted 26 periods ahead. It forms one edge of the “cloud.”
4. Senkou Span B (Leading Span B): This line is the midpoint of the highest and lowest prices over the last 52 periods, plotted 26 periods ahead. It forms the other edge of the “cloud.”
5. Chikou Span (Lagging Span): This line is the closing price of the current period, plotted 26 periods behind.

The area between the Senkou Span A and Senkou Span B forms the “cloud.” Prices crossing above or below the cloud typically indicate a bullish or bearish trend change.

As per the CoinDesk report, XRP has established a firm position above the Ichimoku Cloud, while Bitcoin remains confined within a narrow range below the cloud resistance (upper end). This breakout by XRP follows a year-long consolidation or basing pattern and suggests the potential for further gains.

“The move is meaningful on the chart because it resolves a year-long basing process higher. Intermediate-term momentum is positive and there are (surprisingly) no signs of upside exhaustion, supporting upside follow-through, with next resistance near $0.92,” said Katie Stockton, founder and managing partner at Fairlead Strategies, in a note to clients, as quoted by CoinDesk.

The CoinDesk report also mentioned that a similar bullish outlook awaits Bitcoin if it can break through the higher side of the Ichimoku Cloud, with the next resistance level at $31,900.

At the time of writing, XRP is trading at $0.8230, while Bitcoin is hovering around $30,218.

Featured Image Credit: Photo / illustration by abogawat via Pixabay

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