• XRP price consolidates the persuasive breakout from a bullish bottoming pattern.
  • The fourth-largest cryptocurrency by market capitalization closed April with a gain of 180%.
  • Ripple is a classic high-risk, potentially high-return cryptocurrency opportunity.

XRP price broke the neckline of an inverse head-and-shoulders pattern on April 29, sending Ripple up over 13% for the day. The bottoming pattern projects a notable advance moving forward, exceeding the psychologically important $2.00.

XRP price rewarding the buy the dips investment philosophy

On April 29, the same day as the breakout from the inverse head-and-shoulders bottom, the Santiment MVRV ratio (30-day) for XRP price reached 37.7%. It was one of the highest metric readings going back to 2018, highlighting Ripple was getting overvalued.

The MVRV ratio is two terms. ‘MV’ as in Market Value simply describes the market capitalization, which is well-known when looking at crypto assets. The second part is ‘RV,’ which stands for Realized Value. It gives you an estimate of how overvalued or undervalued the asset is. The higher the reading, or overvalued, the higher the probability of people willing to sell and take profits. The lower the reading, or undervalued, the lower the probability of selling because people would realize losses.

During strong and long bull runs, the MVRV ratio tends to grow, and during bear markets, it is decreasing. The rational is that during strong bull runs, the long-term holders determine when the bull run will end by selling positions, while during bear markets, the long-term holders are at loss on average, and the short-term holders manage to realize profits.

XRP MVRV ratio

XRP MVRV ratio

After rallying 180% in April, 50% for the week and 13% for the day, it is no coincidence that the MVRV ratio did reach a high reading and that long-term holders did liquidate some of their positions. April 30 high at $1.66 could be a local top, but the firmness of price over the last four days suggests that XRP price is just consolidating.

Resistance is anticipated to unfold at the 78.6% Fibonacci retracement of the April decline at $1.73, about 10% above the current price. Ripple enthusiasts are fixated on the psychologically important $2.00 and the 61.8% retracement of the 2018-2020 bear market at $2.08. The XRP price oscillations around $1.00 in early April propose that $2.00 could be imposing.

The measured move target of the inverse head-and-shoulders pattern is $2.47, a gain of 70% from the neckline position on April 29 and nearly 60% from the current XRP price. Aggressive speculators should look to the 78.6% retracement of the 2018-2020 bear market at $1.62 as the ultimate resistance.

XRP/USD 12-hour chart

XRP/USD 12-hour chart

Speculators need to be aware of a negative news roll regarding the SEC lawsuit or simply a new collective decline in the cryptocurrency complex. If so, XRP price will find support at $1.40 and then $1.28, but the legitimate level to watch out for is $1.00.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Cardano price tests bull’s endurance, as ADA battles with all-time high

Cardano price is coiling along the all-time high, unable to participate in the rally of the broader crypto market. The 10-week simple moving average (SMA) has caught up to price, but one final bear-trap may be necessary to remove the weak holders and engage speculators with a longer-term horizon.

More Cardano News

Chainlink price knocks out dual resistance, LINK poised for all-time highs

Chainlink price reaching outer limit of 9-day returns for 2021. Topside trendline looms over rally sustainability. IOMAP data shows trivial resistance at current price level.

More Chainlink News

VeChain price consolidation prolonged, while VET developers pursue a dynamic eNFT ecosystem

VeChain price battles descending trend line with little volume commitment. Key Fibonacci retracement level of the April decline detaining price strength. VET to capitalize on enterprises bringing NFTs to the ecosystem.

More VeChain News

Ethereum price jumps to new all-time highs as eBay is reportedly exploring NFT auctions

Ethereum has exploded in the past 24 hours reaching a new all-time high of $3,204 outperforming Bitcoin and the rest of the market. ETH hit $370 billion in market capitalization almost quadrupling Binance Coin even though it also saw a massive rally. 

More Ethereum News

BEST CRYPTO BROKERS/EXCHANGES




Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast

BTC

ETH

XRP