TL;DR
- XRP’s tight Bollinger Bands suggest a potential large price movement.
- However, current negative market sentiment may affect the asset’s performance.
XRP Bull Run on the Horizon?
Ripple’s XRP was in a significant uptrend at the start of the month, with its price rising from less than $0.40 to over $0.63 in a matter of a few weeks. However, it lost momentum in mid-July, retracing below $0.55 and later climbing to around $0.60, where it has consolidated in the past several days.
One X user believes that the price might soon skyrocket based on the formation of a historical pattern that has previously indicated a massive bull run. Namely, this is the monthly Bollinger Bands, which has squeezed as never before.
“Tighter than before the historic 60,000% rally that ended in early 2018,” the analyst claimed.
The technical analysis tool was introduced by John Bollinger in the early 1980s and is used to measure market volatility and potential price movements. When the bands of the indicator are tight, it signals that the asset has experienced low volatility for a prolonged time and might be poised for a huge move in any direction.
Earlier this month, another X user touched upon the squeezing bands, reminding about XRP’s price rally in previous cases. The token’s valuation hovered around $0.44 at the time of the comment, while a week later, it surpassed the $0.60 mark.
Keeping an eye on the Bollinger bands could be useful, but it is not the only metric worth observing. The Relative Strength Index (RSI), for example, measures the speed and change of price movements, indicating whether the asset is overbought or oversold. It varies from 0 to 100, with a ratio above 70 signaling that a correction could be imminent. In the past several weeks, the RSI has been hovering below that level, currently set at around 47.
Additional Analysis
Another X user who assumed that XRP’s price could be headed for an uptick is Mikybull Crypto. The trader argued that the token’s price chart “displays significant technical signs” observed back in 2017, followed by “massive gains afterward.”
“Historically, the chart always precedes the news,” they added.
Meanwhile, the crypto market has declined in the past 24 hours following the US government’s decision to move around $2 billion worth of its bitcoin (BTC) holdings to another wallet (possibly preparing for a sale).
The negative sentiment could reign for a while, potentially suppressing the valuation of numerous digital currencies, including Ripple’s native token.
In addition, the crypto company will unlock a billion XRP at the start of August, thus increasing the circulating supply of tokens. This practice occurs every month and is part of the firm’s strategy to ensure a transparent release of its holdings. As such, its predictable nature is unlikely to cause any substantial price swings.
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