In the past few hours, the value of the widely recognized cryptocurrency, XRP, is set for a significant milestone following its 6.2% decline on Monday. Interestingly, the price bottomed out at the 20-day moving average, which interestingly coincides with the middle line in the Bollinger Bands indicator, two days ago.
Bollinger Bands are made up of three lines: the top line (upper band), middle line (median), and bottom line (lower band). Usually, the median line represents a 20-day moving average, whereas the upper and lower bands lie about two standard deviations above and below this average. When prices fluctuate within these bands, it may suggest a market that’s bound by a certain range, while crossing these levels often indicates potential shifts in trends.
Following multiple repetitions of tests across shorter periods since then, the value of XRP finished the subsequent day above that level. As per technical analysis textbooks, it experienced a significant increase of approximately 4.51% on the following day.
Conversely, the recovery experienced a hiccup as it was revealed that the U.S. Department of Justice (DoJ) had been given permission to auction off Bitcoin seized from the notorious Silk Road. This disclosure triggered a widespread sell-off, which caused XRP’s price to plummet once more.
Luckily, the price didn’t break through the recently secured middle Bollinger Band on the daily chart, which has kept a bullish sentiment for Ripple (XRP). However, there’s a chance that it might retest this line again, indicating a potential 1.48% drop from the current position.
As a crypto investor, if this retest goes as planned, the possibility of reaching the upper Bollinger Band at approximately $2.51 becomes more tangible, promising potential for substantial profits. On the flip side, should we see a break below the median line, attention might shift towards the lower Bollinger Band, around the $2 mark, where investor interest could be scrutinized.
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2025-01-09 17:22