Double-digit percentage gains for XRP (XRP) this month may have reached a tipping point, mirroring trends elsewhere in the cryptocurrency market.
This follows the euphoria of Ripple’s partial victory against the US Securities and Exchange Commission, resulting in bullish calls for up to $15 in the coming months.
I believe $15 over 18 months is reasonable.
If they go public and time it right it could go as high as $35 IMO.
Make no mistake… it might not go that high… but $xrp Barring some kind of futile, vindictive SEC appeal, break this cycle to record levels. (less likely) https://t.co/rrMCuOacrE
– Ben Armstrong (@Bitboy_Crypto) 19 July 2023
Nevertheless, fractal analysis of XRP’s recent candlestick and price momentum patterns suggest that a sharp market correction is not off the table, especially if history repeats itself.
XRP price fractal drops by 65%
Notably, some XRP market signals preceded a 65% price drop in Q2 2021. These are now flashing again, namely multi-year descending trendline resistance and an “overbought” relative strength index (RSI), as shown below.
A falling trendline resistance (denoted “upper trendline resistance” in the chart above) has limited XRP’s gains since January 2018. This price range is supported by another horizontal trendline resistance (purple) near $0.93.
Overall, the confluence of resistance, combined with an overbought RSI, is now raising the risk of a market correction for XRP. In this case, XRP price is likely to decline by September to the lower trendline support at $0.52, which is a drop of about 40% from the current price level.
Related: SEC’s Reaction to Ripple’s Decision Is Still Pending, Says Chairman Gensler
Interestingly, the downside target appears to be near the 50-week exponential moving average (50-week EMA; red wave) of XRP, increasing the chances of a bounce around this level. Furthermore, Ripple served as a local bottom support during the price decline in Q2 2021.
As of July 20, XRP’s price is up 70% month-to-month, outperforming the broader crypto market, which was up only 5% over the same period.
This article does not constitute investment advice or recommendations. Every investment and trading move involves risk and readers should do their own research when making decisions.
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