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Monday, May 23, 2022

XRP Price Has Exploded By 54% In A Week

The price of XRP surged to a high of three months after it followed a strong uptrend on the 14th of August. Nonetheless, this weekly run-off by this token did trigger several overvaluation risks- which raised multiple possibilities of an imminent pullback on price. The exchange of XRP/USD popped up 11.78% higher to reach a sum of $1.20 for the very first time since the 22nd of May. The gains brought by the pair turned out to be a part of a bullish trend which began on the 20th of July when the price was as low as $0.154- which resulted in an upside retracement of 134% on the whole.

XRP Rings Overbought Alarms

The bullish moves in the market of XRP did prompt two major indicators to predict the price corrections that are absolutely imminent. The first indicator would be the RSI or relative strength indicator which represented a price change magnitude that would evaluate overbought or oversold conditions. To put it simply, the RSI has an oscillating value between 0 and 100, with the reading usually above 70 which shows overbought, and a reading below 30 which is used to indicate oversold conditions. 

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The daily RSI on the exchange of XRP/USD did trigger massive warnings of excessive valuations after the readings went beyond the value of 70. Therefore, the pair experienced quite a modest sell-off near its high of $1.20- which then dipped to a price of $1.14 at the time of press. The second indicator which could result in imminent price corrections is Bollinger Bands. 

These are envelopes that are plotted above a level of standard deviation and below the simple moving average of the XRP price. Interestingly, they do tend to measure the volatility of an asset by basing it on the distance that exists between the lower and the upper band. When the price comes out of the band, it does tend to immediately slide back into the band area.

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