Is XRP bottoming out versus Bitcoin? Chart fractal mirrors 500% rally setup

XRP (XRP) has made a strong comeback against Bitcoin (BTC), gaining around 30% since July’s “triple bottom.” A mix of fundamental and fractal indicators hints that XRP is well-positioned for the gains to continue in the coming months.

XRP price recovery mirrors 2021’s 500% rally

The XRP/BTC trading pair has bounced by over 50% after forming a local bottom at around 760 satoshis (1 satoshi = 0.00000001 BTC) at the beginning of June 2024. This low is significant as it aligns closely with the support level that preceded a 500% rally between January and May 2021.

During the 2021 rally, XRP/BTC encountered resistance at its 50-week exponential moving average (50-week EMA; the red wave), resulting in a pullback before continuing its upward momentum. A similar pattern emerged in August 2024, where the pair faced rejection after testing the 50-week EMA.

It shows traders watch the 50-week EMA as a key level where selling pressure intensifies. However, if XRP/BTC overcomes the wave resistance, it could signal a bullish trend toward the 200-week EMA (the blue wave) at around 1,890 satoshis, similar to its upside target in 2021.

In other words, XRP/BTC could rise by approximately 100% by 2024’s end if it successfully breaks above its 50-week EMA at around 1,120 satoshis.

Post-halving fractal furthers XRP’s bullish outlook

Another bullish signal for XRP is Bitcoin’s potential top in market dominance, which typically follows its halvings.

For instance, the Bitcoin Dominance Index (BTC.D) dropped by over 70% after its second halving in July 2016, indicating that traders rotated their capital from BTC markets to seek exposure in altcoins like XRP.

However, XRP/BTC underperformed following the third halving in May 2020, largely due to the United States Securities and Exchange Commission’s (SEC) lawsuit against Ripple in December 2020, which dampened investor confidence.

Related: Crypto analyst doubts Bitcoin dominance is ‘going back up’ to 70% again

As of August 2024, the SEC vs. Ripple lawsuit has been resolved, with Ripple ordered to pay a $125 million penalty for illegally selling XRP to institutional investors. Since the ruling, XRP/BTC has risen by about 15%, indicating potential for further gains, particularly if Bitcoin dominance follows its typical post-halving decline (in altcoin terms) after the latest halving in April 2024.

XRP looks underbought compared to Bitcoin, Ethereum

XRP looks severely underbought in US dollar terms compared to most top cryptocurrencies, including Bitcoin, so far in 2024.

XRP/USD was down by approximately 3.5% year-to-date versus BTC/USD’s 37.80% gains in the same period. Other altcoins, including Ether (ETH), Solana (SOL), and BNB (BNB), have also outperformed XRP, rising 13%, 30%, and 84% in 2024.

XRP’s relative underperformance could indicate that it has room to catch up if market conditions become more favorable. Investors might see this as an opportunity for XRP pairs to rally, especially if the broader altcoin market continues to perform well.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.