XRP vs. Bitcoin: is XRP bottoming out? Chart Patterns and Market Trends Revealing a Potential 500% Rally

The price of XRP is mimicking a bullish chart fractal from 2021 that was followed by a 500% increase.

In comparison to Bitcoin BTC $64,193, XRP $0.61 has made a significant recovery, rising by around 30% since the July “triple bottom.” A combination of fractal and fundamental indicators suggests that XRP is in a good position for the next few months of increases.

Price recovery of XRP is similar to 2021’s 500% surge

After forming a local bottom at roughly 760 satoshis (1 satoshi = 0.00000001 BTC) at the beginning of June 2024, the XRP/BTC trading pair has increased by more than 50%. Because it closely resembles the support level that came before a 500% rally that took place between January and May of 2021, this low is noteworthy.

When XRP/BTC faced resistance at its 50-week exponential moving average (50-week EMA; the red wave) during the 2021 surge, it pulled back before resuming its upward trajectory. When the pair tested the 50-week EMA in August 2024, they encountered resistance; a similar pattern occurred.

It indicates that traders keep an eye on the 50-week EMA as a critical mark when selling pressure increases. But if XRP/BTC breaks through the wave barrier, it would indicate a positive trend toward the blue wave, or the 200-week EMA, which is located at about 1,890 satoshis. This would be comparable to the upside objective set for 2021.

In other words, if XRP/BTC is able to break over its 50-week EMA at about 1,120 satoshis, it might grow by about 100% by the end of 2024.

Post-halving fractal strengthens the positive picture for XRP

The possibility of Bitcoin reaching its peak in market dominance—which usually happens after its halvings—is another encouraging indication for XRP.

For example, following its second halving in July 2016, the Bitcoin Dominance Index (BTC.D) fell by more over 70%, suggesting that traders were shifting their capital from BTC markets to alternative coins like XRP.

However, after the third halving in May 2020, XRP/BTC underperformed, partly as a result of investor dread brought on by the US Securities and Exchange Commission’s (SEC) lawsuit against Ripple in December 2020.

The SEC vs. Ripple case was settled in August 2024, and Ripple was mandated to pay a $125 million fine for selling XRP to institutional investors without authorization. The fact that XRP/BTC has increased by almost 15% since the verdict suggests that there may be room for more gains, especially if Bitcoin dominance experiences the usual post-halving decrease (in terms of other cryptocurrencies) during the next recent halving in April 2024.

XRP appears underbought compared to Bitcoin and Ethereum

Compared to the majority of the most popular cryptocurrencies, including Bitcoin, XRP appears to be significantly underbought in US dollars as of 2024.

XRP/USD has lost roughly 3.5% of its value year to date, whereas BTC/USD has gained 37.80% within the same time frame. Other cryptocurrencies that have outpaced XRP include Ether (ETH $2,762), Solana (SOL $154), and BNB ($579), which have increased by 13%, 30%, and 84% in 2024.

The relative underperformance of XRP may mean that, should market conditions improve, it has space to catch up. If the overall altcoin market continues to perform well, investors may view this as a chance for XRP pairs to rise.

The cryptocurrency landscape is ever-evolving, with XRP and Bitcoin standing out as two key players. While Bitcoin has firmly established its dominance, recent developments suggest that XRP might be gearing up for a major breakout. This blog delves into the current state of XRP, analyzing its price action, chart patterns, and market trends to assess whether a 500% rally could be on the horizon.

Historical Patterns and Current Trends

XRP’s recent price behavior has caught the attention of traders and analysts alike. The cryptocurrency appears to be mirroring a bullish chart fractal from 2021, a period that saw Ripple experience a staggering 500% increase. This fractal involves a similar price pattern where Ripple formed a local bottom before embarking on a significant upward journey.

In June 2024, Ripple/BTC formed a notable local bottom around 760 satoshis. Since then, the pair has surged by over 50%, displaying similarities to the support level preceding the 2021 rally. This correlation is crucial as it suggests that Ripple could be at the beginning of another significant uptrend.

Resistance and Support Levels: Key Indicators

One of the most important technical indicators for Ripple/BTC is the 50-week exponential moving average (EMA). During the 2021 surge, Ripple/BTC faced resistance at this level before eventually breaking through and continuing its upward trajectory. We are seeing a similar scenario unfold in August 2024, where the pair once again encountered resistance at the 50-week EMA.

For Ripple/BTC to confirm a bullish trend, it will need to break through this resistance level. A decisive move above the 50-week EMA at approximately 1,120 satoshis could signal a potential rise towards the 200-week EMA, positioned around 1,890 satoshis. This scenario aligns with the positive outlook for Ripple’s price movement, suggesting a potential upside of around 100% by the end of 2024.

Post-Halving Dynamics: Bitcoin’s Influence on XRP

Bitcoin’s market dominance often influences the performance of alternative cryptocurrencies like Ripple. Historically, Bitcoin’s market dominance tends to decrease following its halvings, leading to capital flowing into altcoins. The second Bitcoin halving in July 2016 saw Bitcoin dominance drop significantly, benefiting altcoins.

The third Bitcoin halving in May 2020, however, saw Ripple/BTC underperform, partly due to the SEC’s lawsuit against Ripple. With the SEC vs. Ripple case now settled and Ripple agreeing to a $125 million fine, Ripple has shown a 15% increase since the verdict. This rebound is promising, especially if Bitcoin dominance follows the typical post-halving pattern of decreasing, which could further favor Ripple.

Comparative Underperformance and Future Potential

Ripple has been noticeably underperforming compared to its major counterparts, such as Bitcoin and Ethereum. Year-to-date, Ripple/USD has declined by about 3.5%, whereas Bitcoin has risen by 37.8% and Ethereum by 13%. Despite this, Ripple’s relative underperformance might actually signal a potential for significant upside if market conditions improve.

The current market dynamics indicate that Ripple could be well-positioned to catch up if the broader altcoin market continues its upward trend. Investors might view this as a valuable opportunity to gain exposure to Ripple, particularly if it breaks out of its current resistance levels.

Conclusion

The combination of historical chart patterns, key technical indicators, and market trends paints a potentially bullish picture for XRP. The current setup resembles the prelude to a massive rally experienced in 2021. If XRP/BTC can overcome its resistance at the 50-week EMA, we could be looking at a substantial increase in the coming months.

However, as always with cryptocurrency investments, it’s crucial to remain cautious and informed. Market conditions can shift rapidly, and while the signs are promising, investors should keep an eye on evolving trends and adjust their strategies accordingly.

In summary, XRP may very well be on the brink of a significant rally, echoing past performance and leveraging current market dynamics. For those considering an investment in XRP, it might be worth keeping a close watch on these developments as they unfold.