Ripple Showing Rising Relative Strength
Ripple (XRP) has outperformed the overall crypto market showing relative strength versus the Altcoin index. However, the XRP price is still trapped inside a 4-month consolidation pattern, with the upper resistance line being close to the $0.50 figure.
Ripple Relative Strength
The relative strength metric can help us spot which cryptocurrencies are outperforming the general market. And it's a bullish sign when the XRP price makes a higher low at the time when the Altcoin index, which tracks the performance of the overall altcoin market, is making a lower low.
This means that the XRP's price is rising while the other cryptos are falling.
Consolidation Pattern The 4-month-old consolidation pattern led to a local bottom of $0.287 and resistance at $0.457. If the current XRP relative strength continues to progress, there is a high probability of seeing a retest of the top of the consolidation pattern.
The rally can even extend further to tag the 200-day simple moving average, which currently stands near the $0.50 mark.
Weekly Stochastic Indicator
Additionally, the stochastic indicator on the weekly chart is emerging from oversold readings (below the 20 level) for the first time since the current consolidation phase. This can further sustain the recent bounce.
Looking forward: Since we're still inside a consolidation pattern, the real danger is that we may end up with tighter price action until a real catalyst triggers a breakout.
What is a Stochastic Indicator?
A Stochastic Indicator is a momentum indicator that is used to gauge the direction and strength of a current trend. The indicator is calculated by taking the highest high over a certain period and dividing it by the lowest low over that same period. A rising stochastic indicator means that the current trend is gaining strength, while a falling stochastic indicator means that the current trend is losing strength.