After a significant increase of nearly 500% in recent weeks, the price of XRP, currently the third largest cryptocurrency, seems to be approaching a local peak. While it aligns with the performance of the broader cryptocurrency market, XRP may not stop there for a correction, ultimately finding a recent drop point far below the current level of $2.26.
The Bollinger Bands indicator particularly suggests this trend. The Bollinger Bands indicator is a popular indicator developed by John Bollinger, consisting of a simple moving average line and two deviation lines located above and below the average, which together form a range. Currently, the price of XRP is right at the upper band, with a median of $1.
The gap is significant. The last time something similar happened was in 2021, when the price eventually reached the median in the following weeks. However, the recent situation is more akin to what XRP enthusiasts saw in 2018.
At that time, the price of this popular cryptocurrency was $3.3, which was actually the historical highest price for XRP, with a median of $0.72.
Long story short, the price of XRP dropped by more than 82% in the following four weeks, hitting a low of $0.5627, and entered a three-year accumulation phase. Even in 2021, after reaching the median, the price of the cryptocurrency actually fell below the median, with the distance between the ranges narrowing again.
Although this is not set in stone, based on XRP's historical trends, this situation may repeat itself, which is why it is important not to let delusions about the token cloud judgment and potentially take at least some profits from the recent crazy rebound.
