XRP has seen an explosive rally, breaking through major resistance levels and hitting its highest levels in nearly seven years.
However, as the market shows signs of overheating, a consolidation phase is expected in the short term.
XRP Analysis
By shayan
The weekly chart
Ripple has shown an impressive surge, rising over 100% since last week, breaking through the $2 resistance level and reaching $2.5 for the first time since January 2018. This strong upward move indicates a dominant buying presence. in the market.
The price action reflects extreme optimism, but the RSI has risen into overbought territory, suggesting the market is overheated. These conditions usually precede a period of consolidation or corrective pullbacks, as buyers may need time to digest the gains before pushing the price up again.
In the medium term, the key support level to watch is the $2 threshold, which has now emerged as crucial support after being claimed as resistance during the recent rally. A pullback towards this level would be healthy for the market as it would offer buyers a chance to regroup ahead of a possible continuation of the uptrend.
The 4 hour chart
On the 4-hour time frame, the bullish structure is clear, with higher highs and higher lows. Ripple has successfully reclaimed several key resistance levels, including its previous ATH of $2, before reaching the new mark of $2.5.
The asset recently broke above the upper trend line of an ascending channel, further emphasizing the dominance of buyers. However, the RSI on this shorter time frame shows a notable bearish divergence, indicating that a correction is likely in the near term.
With its large number of leveraged positions, the overheated futures market increases the likelihood of a cascade of liquidations if the price experiences a sharp decline. This suggests that while the medium-term outlook remains bullish, consolidation or pullback is expected in the near term, which could lead to higher volatility.
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Cryptocurrency charts by TradingView.
