Last week, Ripple’s token recorded a dramatic surge of almost 60%. This is its best performance since August 2021. This meteoric rise allowed it to cross a critical weekly resistance: the Ichimoku cloud. This bullish breakthrough in XRP could also have a positive impact on bitcoin (BTC).
Ichimoku Cloud, a relevant indicator
The “Ichimoku Cloud”, created by Japanese journalist Goichi Hosoda in the late 1960s, is one of the oldest methods of technical analysis. It is a tool widely used by traders and analysts. Indeed, it allows to identify the levels of support and resistance, as well as to evaluate the changes of trend.
The indicator consists of five lines based on price moving averages. These are Leading Span A, Leading Span B, Tenkan-Sen (T), Kijun-Sen (K) and a lagging closing price line. The space between Leading Span A and Leading Span B forms the cloud.
XRP breaks through the cloud, a critical resistance
Currently, XRP has firmly established its position above the weekly Ichimoku cloud after a year-long phase of consolidation. On the other hand, bitcoin (BTC) is holding a tight range below cloud resistance. This breakout of the Ripple token suggests a bullish outlook ahead.
According to Katie Stockton, Founder and Managing Partner of Fairlead Strategies, “ this movement is significant on the chart because it ends a one-year upward consolidation period. The medium-term momentum is positive and there is (surprisingly) no sign of exhaustion on the upside, supporting an upward continuation, with next resistance around $0.92.”
Similar optimism is turning towards the parent cryptocurrency which sits on the lower side of the Ichimoku cloud. Investors should therefore carefully watch the next resistance level at $31,900. If bitcoin (BTC) manages to make a similar breakthrough to XRP, it could strengthen the bullish hypothesis for the entire crypto market. Thus, investors should closely monitor the development of the situation. Indeed, a break above the cloud for Bitcoin (BTC) could signal a bull market for the entire crypto market.
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