• 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.

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Tezos Price Prediction: XTZ to provide bulls a generous exit before a 15% nosedive

Tezos Price Prediction: XTZ to provide bulls a generous exit before a 15% nosedive

Tezos Price is hovering above a stable support level after facing an intense rejection. While this foothold is likely to provide harbor, it will not be for long. Investors must prepare for a long squeeze as bears make an elaborate move.

More Tezos news

AVAX price exhaustion could lead to sizeable retracement, but for the better

AVAX price exhaustion could lead to sizeable retracement, but for the better

AVAX price is in a no man’s land and depending on how the altcoin reacts to a few barriers, investors can bet on its direction. But a minor retracement in the short-term seems likely given the current market conditions.

More Avalanche news

Why Terra’s LUNA is bound to face a technical punishment

Why Terra’s LUNA is bound to face a technical punishment

Terra (LUNA) price action is facing headwinds from both sides as a technical candlestick pattern is throwing a spanner in the works, together with that long-feared dollar strength that is re-emerging after several warnings from Fed.

More Terra news

Why Solana price action is going nowhere

Why Solana price action is going nowhere

Solana's (SOL) price, from a first glance at the sheet, looks bullish and set forth to continue its rally and winning streak. However, a closer look under the hood reveals that on a weekly chart, price action is going nowhere and could soon collapse once a tail risk gets inflated again.

More Solana news

Bitcoin: If bulls lose control here, BTC could revisit $21,000

Bitcoin: If bulls lose control here, BTC could revisit $21,000

Bitcoin price shows an interesting setup that could reveal its next move. On closer inspection,  its technicals support a bearish outlook for the leading crypto.  

Read full analysis

BTC

ETH

XRP