Pseudonymous analyst has spotted a classic technical setup involving a descending resistance trendline and horizontal support zones on the chart that compares the value of XRP against WTI Crude Oil.
XRP has been in a "fierce downtrend for nearly 3 months." However, this could change soon.
Key levels to watch
The most prominent feature of the chart is the white diagonal line sloping downward from the October highs.
The white arrows point to specific moments where the price attempted to rise but hit this "ceiling" and was rejected. This confirms the trendline is valid and currently acting as strong resistance.
The shaded area around 0.0440 represents a major resistance zone. The red hammer icons indicate areas where selling pressure historically pushed the price down.
At the same time, the area around 0.0270 - 0.0290 is the major support zone. The green icons show where buyers stepped in previously.
The price is currently hovering around 0.0335, sitting just above an intermediate support line.
The analyst believes the selling pressure is exhausted and a bounce is imminent. He is waiting for the price to break through the white diagonal trendline and close above it.
If the price breaks that diagonal line, the analyst expects a massive rally.
Digital oil?
Some XRP proponents have historically used the "oil" analogy to describe the token's utility.
The altcoin is viewed as the "fuel" or utility that powers the engine of global finance. Just as oil is essential for moving physical goods and powering the industrial economy, XRP is designed to move value and power the "Internet of Value." It is meant to be consumed and used instead of just being hoarded.
It is also worth noting that Ripple holds a massive amount of XRP in escrow (originally 55 billion), releasing a portion every month. Cory Johnson, Ripple’s former chief marketing strategist, has compared this mechanism to OPEC (Organization of the Petroleum Exporting Countries).
