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Ethereum (ETH) is making its bid to break the shackles of the last six weeks of downtrend. Ripple (XRP) is in prime position to follow. Can they both break free? How high can they go?
$ETH inverse head and shoulders playing out?
Source: TradingView
$ETH is breaking out right now. The price has broken through the descending trendline and it just remains to be seen whether it holds above, or whether this is a fake-out.
Declining volume could point to a fake-out, but this can be remedied. It might be expected that the price returns to test the breakout area first, and it will be at this point where it will be seen if a bounce occurs, or if the price returns back under the descending trendline.
A major factor in support of the breakout thesis is the inverse head and shoulders pattern, which can seen in the chart above. If the confirmation of the breakout is successful, this will potentially also confirm that the inverse head and shoulders pattern is playing out. If it does so, the measured move would be to exactly $4,000 - just short of the local high.
$ETH $4,000 target
Source: TradingView
The weekly chart for $ETH gives more of a bird’s eye view. Here it can be seen that the price is indeed at a very crucial point. A successful breakthrough of the descending trendline will correspond with a breakthrough of the 0.618 Fibonacci.
The 0.786 Fibonacci also coincides perfectly with the measured move for the inverse head and shoulders pattern, at $4,000. Given that the last rally did in fact make a slightly higher high, it might be expected that the price is able to push on from there, if of course it can get there.
$XRP could follow $ETH price action
Source: TradingView
The 4-hour chart for $XRP shows that this cryptocurrency could follow the $ETH breakout. The price will either break above the descending trendline, or it will break below the strong support at $2.90.
Just as is the case with $ETH, a potential inverse head and shoulders pattern is a possibility. That said, there has already been a rejection at the descending trendline for the right shoulder. Although if the breakthrough happens in the very near future, the pattern could still play out.
$XRP incredible parabolic gains
Source: TradingView
When looking at $XRP on the weekly timeframe one can truly appreciate the incredible parabolic gain that this cryptocurrency has made just since the beginning of last November. 591% is quite some reward for those who clung on over the last six years or so.
Will this incredible rise continue? With all the crypto hype induced by the new Trump administration, anything is possible. If the price is able to get above the previous high, the 1.618 Fibonacci level is an inspirational target - who knows …
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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