Ripple’s XRP token could be on the brink of a major 30% correction if the recent head and shoulders pattern plays out, according to renowned veteran trader Peter Brandt.
Brandt explained his view on Twitter by stating: “It will be interesting to see if this H&S top plays out. If so, the target would be $0.2071.”
XRP is now 23% lower than Saturday’s high of $0.35 with it currently trading at around the $0.27 level of support.
A head and shoulders pattern in terms of technical analysis is typically a reversal signal which, should it come to fruition, means it will likely cause a new bearish trend.
However, one positive for XRP is that it bounced from the daily 200 exponential moving average (EMA), which was a key point of support and resistance throughout both 2018 and 2019.
It will be interesting to see if this H&S top plays out. If so, the target would be .2071.
This Tweet poses a possibility. This is not a prediction. pic.twitter.com/IJiMR2AEnV
— Peter Brandt (@PeterLBrandt) February 20, 2020
If Thursday’s daily candle can close above the 200 EMA it would signal that XRP may be ready to make a move back to the upside, thus invalidating Brandt’s theory of a possible head and shoulders.
Closing a daily candle below the 200 EMA would be catastrophic for XRP considering the daunting possibility of a reversal.
If a break down in price happens this evening, initial price targets would be $0.243 and $0.230 as well as Brandt’s target of $0.2071.
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