XRP has experienced explosive growth, breaking through significant resistance levels and reaching its highest point 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 shown an impressive surge, rising more than 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 the dominance of buying power in the market.
The price action reflects extreme optimism, but the RSI has surged into the overbought territory, indicating that the market is overheated. This situation typically precedes a consolidation period 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 redefined as a resistance level during the recent surge and has now become a key support level. A pullback to this level is beneficial for the market, providing buyers with an opportunity to regroup before a possible continuation of the upward trend.
4-Hour Chart
In the 4-hour time frame, the bullish structure is clear, with both highs and lows consistently rising. XRP has successfully reclaimed several key resistance levels, including the previous $2 high, before surging to the new $2.5 milestone.
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 time frame shows clear bearish divergence, suggesting that a pullback may occur in the short term.
Due to the large number of leveraged positions, in an overheated futures market, a significant price drop increases the likelihood of a liquidation chain reaction. This indicates that while the medium-term outlook remains bullish, a consolidation or correction is expected in the short term, which may lead to increased volatility.
