After hitting a four-year low, XRP seems to be on the way back into the trading pair against Bitcoin. The driving force for this optimistic development is the appearance of the classic bullish "triple bottom" model.
XRP Aims for 30% Recovery Against Bitcoin
The triple bottom pattern develops when price forms three separate lows, all of which reach similar price levels, thus indicating strong support.
Illustration of a triple bottom trend reversal
After the third bottom, the price broke above the neckline resistance formed between the lows. According to the rules of technical analysis, the price will increase by the maximum distance between the lowest point of the pattern and the neckline.
As of July 12, the XRP/BTC pair is testing the neckline support level around 793 satoshis (1 satoshi = 0.00000001 BTC) in preparation for a potential breakout.
XRP/BTC Weekly Price Chart | Source: TradingView
Additionally, the pair's weekly relative strength index (RSI) is around 36, implying XRP is undervalued compared to Bitcoin. This further boosts the potential for recovery in the coming weeks. Thus, a decisive close above 793 satoshis would likely push XRP/BTC towards the triple bottom target of around 1,055 satoshis.
Conversely, a pullback from neckline resistance (like similar pullbacks in recent history) risks pushing XRP/BTC towards the local bottom of 664 satoshis in August, which is 15 satoshis lower. % compared to current price.
Bitcoin's 20% drop is beneficial for XRP price
XRP's renewed strength over Bitcoin mainly stems from the German government's ceaseless sale of its BTC holdings in July. Outflows from these government-linked wallets amounted to46,200 BTC since mid- June, equivalent to about $2.69 billion worth of potential selling pressure.
German Government Bitcoin Wallet Balance | Source: Arkham Intelligence
Furthermore, Mt. Gox's ongoing return of more than 140,000 BTC to creditors also reduced traders' demand for the cryptocurrency king, which saw the XRP/BTC pair increase by more than 20% in July.
Overall Bitcoin dominance has dropped to 53.4% at press time from a high of 55.46% a week ago, suggesting traders may be turning to altcoins while the BTC price consolidation period takes place. .
Daily Bitcoin Dominance Rate | Source: TradingView
Overall, XRP is buying at a relatively low price compared to most of the top-ranked cryptocurrencies so far in 2024, as its year-to-date returns are around -26.5%.
The weekly RSI for XRP/BTC is recovering after hitting a two-year low around 33, just three points above the oversold threshold. Historically, when XRP's weekly RSI reached 33, it was followed by an impressive 194% increase, indicating the potential for significant upward movement this time.
XRP Weekly Price Chart | Source: TradingView
By comparison, BTC's weekly relative strength is in correction mode, falling from an overbought level of 88 in March to a neutral level of 45.5 on July 12.
Weekly BTC Price Chart | Source: TradingView
This decline shows that Bitcoin's price momentum has weakened significantly over the past two months, which could benefit "cheaply bought" large-cap altcoins like XRP in the coming weeks. Additionally, XRP could reap other benefits from the growing buzz about the “inevitable” ETF launch.
You can see BTC price and XRP price here.
https://tapchibitcoin.io/bitcoin-mat-30-so-voi-xrp.html
