On May 30, Ripple’s XRP experienced a significant breakthrough as it surpassed a crucial resistance line, reaching a new monthly high. However, despite this bullish move, several factors indicate a potential price decrease in the near future. In addition to technical analysis suggesting a local top, the release of a substantial number of XRP tokens from an escrow account may contribute to selling pressure. This article delves into the recent price action of XRP, explores technical indicators, and provides insights into the potential future direction of the cryptocurrency.
Ripple Price Clears Crucial Resistance: After a period of correction, the price of XRP managed to break out from a descending resistance line on May 26, signaling the completion of the short-term correction. This breakout led to a high of $0.53 on May 30. However, the price faced rejection near the 0.618 Fibonacci retracement resistance level at $0.52, indicating a potential barrier for further upward movement.
RSI Indicates Overbought Conditions: The Relative Strength Index (RSI), a widely used momentum indicator, confirmed the legitimacy of the breakout. However, it also revealed that XRP entered overbought territory, where local tops are frequently observed. Although the RSI reading remained above 50 and continued to rise, this suggests a cautionary stance as the market may be due for a reversal.
XRP Price Prediction: Possible Local Top: Based on a technical analysis within a short-term four-hour timeframe, it is suggested that XRP’s recent rebound is temporary and likely to be followed by another decline. The Elliott Wave theory, a tool used to analyze price trends and investor psychology, supports this bearish outlook. The wave count indicates that XRP completed a five-wave decline, confirming a bearish trend. Moreover, this decline was followed by an upward corrective phase labeled as A-B-C, further reinforcing the bearish possibility.
A Future Decrease Expected: If the long-term wave count is accurate, the breakout from the descending resistance line is likely part of another corrective wave. The rejection near the 0.618 Fibonacci retracement level strengthens this possibility. Therefore, according to this analysis, a local top has potentially been reached, and a decline to $0.34 is anticipated.
Escrow Release and Selling Pressure: The release of 500 million XRP tokens from escrow adds weight to the projected price decrease. Such a significant release could introduce substantial selling pressure, potentially leading to a sharp downward movement. Traders and investors should closely monitor the impact of this release on XRP’s price dynamics.
Conclusion: While Ripple’s XRP experienced a notable breakout and reached a new monthly high, various indicators suggest a potential price decrease in the near future. Technical analysis, including the wave count and rejection at the 0.618 Fibonacci retracement level, points to a local top and an expected decline to $0.34. Additionally, the release of a substantial number of XRP tokens from escrow introduces the possibility of significant selling pressure. However, if XRP manages to surpass the yearly high of $0.58, the bullish trend would remain intact, potentially paving the way for further gains up to the next resistance level at $0.90. As always, traders and investors should exercise caution and conduct thorough analysis before making any financial decisions regarding XRP.
