Ripple Rebound? XRP Price Jumps to 7-Week High

Ripple's native XRP token jumped to a near seven-week high of $0.28 yesterday despite technical indicators that suggested the cryptocurrency's recent rally might be overdone.

While a re-test of the August 31 high of $0.26 was on the cards, the rally was something of a surprise given that the broader market is under pressure. At press time, the ripple-U.S. dollar (XRP/USD) exchange rate is up 10.47 percent at $0.27. Week-on-week, the cryptocurrency is up 33.33 percent, while month-on-month, it's up 27 percent.

Even so, XRP is well short of its record high of $0.39 set in May. As such, the present XRP rally could be a result of renewed interest among traders ahead of anticipated publicity for the company. If so, that makes the cryptocurrency vulnerable to "profit taking" following the conclusion of the event.

As of now, however, XRP bulls have no reason to fear. Price action analysis indicates the cryptocurrency is all set for a rally to possibly record highs.

Daily chart

The daily chart shows:

Rounding bottom formation
Bullish rising channel breakout
Overbought 14-day relative strength index (RSI)
Five-day moving average and 10-day moving average sloping upwards
Volumes rose over the weekend, which adds credence to the bullish price action

A "rounding bottom" is a saucer-shaped formation suggesting bearish-to-bullish trend change. In XRP's case, that means the pullback after the May high of $0.39 is over and the bulls have regained control.

The overbought RSI indicates an extended move to the upside. The term "overbought" indicates a market that has advanced to a point at which, historically, it has tended to reverse and move lower.

View

Due to overbought RSI, short-term consolidation or a minor pull back to $0.25–0.24 cannot be ruled out.
The broader outlook remains constructive. XRP looks set to take out the August high of $0.2980 and test record high of $0.3988 by the year's end.
Only a drop below $0.1868 (May 30 low) would signal a long-term bullish-to-bearish trend change.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripple.

Climbing wall image via Shutterstock

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Omkar Godbole

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.