- XRP price has retraced to a crucial support barrier at $1.42.
- On-chain metrics like Network Profit and loss and MVRV suggest a reset due to recent crash.
- A bounce from the demand zone extending from $1.33 to $1.40 could trigger a 40% bull rally.
XRP price shows the promise of a bull rally that could create new yearly highs. This move comes after Ripple tested a critical support barrier.
XRP price looks to bounce
XRP price has dropped nearly 10% in a previous 4-hour candlestick to test the head-and-shoulders pattern’s neckline at $1.42.
This setup contains three swing lows, with the central dip referred to as the head, while the other two of comparable depths are known as shoulders. The swing highs of these peaks can be connected using trend lines to form a horizontal resistance at $1.42, known as a neckline.
A decisive close above $1.42 forecasts a 35% upswing, which is the distance between the neckline and head’s low. Adding this measure to the horizontal resistance yields a target at $1.98.
After breaking out of this pattern on April 30, the remittance token surged 19% but faced rejection around $1.65, which has resulted in a 15% crash to $1.42, where XRP price currently trades.
If the buyers join hand, XRP price could skyrocket 40% to $1.98 after slicing through the supply barrier at $1.65.
XRP/USDT 4-hour chart
Supporting this upswing is the reset of Ripple’s Network Profit and Loss (NPL) indicator, which calculates the overall return across all daily transactions. Hence, a spike in this metric coincides with the possibility of a local top.
This fundamental index surged on May 1, representing the initial rejection at $1.65. Following this, May 3 also saw a sudden uptick in NPL, suggesting that many addresses were in profit, opening up the possibility of investors booking profits.
At the time of writing, this metric has reset to zero, paving the way for more upswings.
XRP network profit and loss chart
The same events transpired with Santiment’s 30-day MVRV model, which tracks the network’s profit/loss for addresses that purchased XRP in the past month.
This metric is also resetting after hitting a local top at 0.238%, indicating that a bullish upswing could be around the corner.
XRP 30-day MVRV chart
Regardless of the pattern, if the bearish momentum slices through $1.31, then the optimistic scenario around XRP price will face invalidation. In that case, Ripple could slide 11% to test the subsequent support at $1.16.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Follow us on Telegram
Stay updated of all the news
Coinbase to list Arbitrum with experimental label, warns users to send ARB only over Ethereum network
In a March 22 announcement, Coinbase revealed intentions to support Arbitrum’s upcoming native token, ARB, by listing it for trading on the largest cryptocurrency exchange in the United States. The disclosure was bountiful, featuring several other details for Arbitrum users.
TRON price crashes 12% as SEC charged founder Justin Sun for violating securities laws
TRON price plummeted on March 22 after the cryptocurrency became the new target of the ongoing regulatory crackdown in the United States. The Security and Exchange Commission (SEC) is now looking into Tron founder Justin Sun’s company and related entities of the altcoin’s ecosystem.
ApeCoin price at crossroads, looks to retest February highs amid the alt season but there's a catch
ApeCoin price is at crossroads after trading within a symmetrical triangle on the one-day chart. The altcoin is in a neutral formation reliant on the impending breakout that will determine the direction of the next move. The pattern contains at least two lower highs and two higher lows.
Dogecoin Price Forecast: DOGE coils up for an upswing as alt season clocks in
Dogecoin price has heeded the invite to the alt season to trade with a bullish inclination and record more gains for investors. Despite overhead pressure due to multiple supplier congestion zones, DOGE bulls have put the right foot forward and now the meme coin is preparing for another northbound move.
Weekly Recap: Bank runs, stablecoin drama, Voyager bankruptcy hearing, threat to DOX Shiba Inu founder
US bank runs sent shockwaves through market participants, traders turned to Bitcoin and the “safe haven” narrative made a comeback. Binance’s $1 billion acquisition of bankrupt crypto lender Voyager is back on track with a ruling from a New York bankruptcy judge.