XRP’s meteoric rise versus Bitcoin could be doomed: Bollinger Bands signal caution

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Following yet another impressive week for widely-used cryptocurrency XRP, culminating in a surge of more than 24%, it appears that optimism surrounding the digital token could be waning in the days ahead, giving rise to some concerns.

Over the past six days, the value of XRP has skyrocketed by 35%, reaching an unprecedented peak of $3.4 – a figure unseen for seven years. Interestingly, the price fluctuations of the third largest cryptocurrency have not mirrored broader market trends, but rather, have occurred independently.

In simpler terms, XRP increased by 12% relative to Bitcoin (BTC) and an impressive 26% compared to Ethereum (ETH). At one point, it was 30% more valuable than Bitcoin, but currently, 1 XRP costs approximately 0.0000342 BTC. It appears that the market value for these two cryptocurrencies has reached a plateau or limit at this price point.

An often-used technical analysis tool, known as Bollinger Bands, suggests that there’s a potential limit in the relationship between XRP and the top cryptocurrency. This tool, devised by John Bollinger, utilizes two price divergence lines and a midpoint to establish a price zone within which traders can approximate the degree of undervaluation or overvaluation of the asset.

Looking at XRP versus Bitcoin, we see that the price of XRP has been climbing relative to Bitcoin over both daily and weekly periods. Given this information, it seems more probable that XRP will experience a drop compared to Bitcoin in the near future, rather than continuing its upward trend.

In other words, if the current trend holds steady, there’s a possibility that XRP might decrease by around 10% if the middle line (median) offers substantial resistance. However, if the downward movement persists, it could potentially fall by approximately 31% once the lower band is reached.

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2025-01-19 17:20