XRP has completed a significant Elliott Wave 3 movement, reaching targets between $3.01 and $3.07 during Tuesday's market recovery, according to crypto analyst Dark Defender. The cryptocurrency now faces a pivotal test at the $3.13 resistance level that will determine whether the current rally continues or triggers a substantial correction.
What to Know:
- XRP completed its Elliott Wave 3 target between $3.01-$3.07, with analyst Dark Defender noting this as a crucial technical milestone
- The $3.13 resistance level represents a make-or-break point that could either validate continued bullish momentum or trigger a bearish E Wave decline to $2.74
- Wave 4 corrections typically follow bullish Wave 3 movements, potentially offering buying opportunities before the final Wave 5 rally phase
Technical Analysis Points To Dual Scenarios
Dark Defender's Elliott Wave analysis suggests XRP faces two distinct paths forward. The completion of Wave 3 between $3.01 and $3.07 marks a significant technical achievement, but historically bullish waves often trigger corrections through Wave 4 patterns.
Wave 4 represents a bearish phase that typically follows strong upward momentum. This correction phase could provide strategic entry points for investors looking to accumulate positions before the next rally phase. The analyst notes such corrections are standard market behavior following substantial price advances.
The critical factor determining XRP's direction centers on the cryptocurrency's ability to break through $3.13 resistance. This level represents more than technical resistance—it serves as the dividing line between continued bullish momentum and potential bearish reversal patterns.
Resistance Break Could Invalidate Bearish Scenarios
A decisive break above $3.13 would invalidate bearish wave patterns entirely, according to Dark Defender's analysis. Such a breakout would signal continued dominance from bullish investors and potentially trigger the final Wave 5 pattern, historically the most bullish phase in Elliott Wave theory.
However, rejection at this resistance level could activate the E Wave scenario. This bearish pattern would send XRP through multiple Fibonacci retracement levels, potentially driving the price down to $2.74. The E Wave represents a steep decline that would retrace significant portions of recent gains.
Current market conditions show the D Wave remains active, suggesting bullish forces maintain control. This wave pattern supports the possibility of eventual $3.13 resistance breakdown rather than rejection.
Elliott Wave Theory Context
Elliott Wave analysis divides market movements into five distinct phases, with Waves 1, 3, and 5 representing bullish momentum and Waves 2 and 4 showing corrective patterns. Wave 3 typically generates the strongest upward momentum, while Wave 5 often produces final rally phases before major corrections.
The theory suggests Wave 4 corrections provide necessary market breathing room before final upward moves.
These patterns help identify potential support and resistance levels based on mathematical relationships between wave structures.
Fibonacci retracements play crucial roles in Elliott Wave analysis, providing specific price targets during both bullish and bearish phases. These levels help traders identify potential reversal points and continuation patterns.
Closing Thoughts
XRP's completion of Elliott Wave 3 between $3.01-$3.07 sets up a critical test at $3.13 resistance, where breakthrough could trigger final Wave 5 rallies while rejection might activate E Wave declines to $2.74. The cryptocurrency stands at a technical crossroads that will likely determine its medium-term price direction based on bullish or bearish wave pattern validation.