XRP has experienced explosive growth, breaking through significant resistance levels and reaching its highest level in nearly seven years.
However, due to signs of market overheating, a consolidation phase is expected in the short term.
XRP Analysis
Weekly Chart
XRP has demonstrated 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 trend indicates a dominant buying force in the market.
The price action reflects extremely optimistic sentiment, but the RSI has surged into the overbought territory, indicating that the market is overheated. This situation typically precedes a consolidation phase or corrective pullback, as buyers may need time to digest the gains before pushing prices higher again.
In the medium term, a key support level to watch is the $2 threshold, which was recently reconsidered as a resistance level during the recent surge and is now a key support level. A pullback to this level is beneficial for the market, providing an opportunity for buyers to regroup before a possible continuation of the upward trend.
4-Hour Chart
On the 4-hour timeframe, a clear bullish structure is evident, with both highs and lows continuing to rise. XRP has successfully reclaimed several key resistance levels, including the previous $2 high, and then surged to the new $2.5 threshold.
The asset recently broke above the upper trend line of the ascending channel, further emphasizing the dominance of buyers. However, the RSI in this shorter timeframe shows a clear bearish divergence, indicating a potential pullback in the short term.
Due to the large number of leveraged positions, the overheated futures market increases the likelihood of a chain reaction of liquidations once prices drop significantly. This indicates that while the medium-term outlook remains bullish, a consolidation or pullback is expected in the short term, which may lead to increased volatility.
