Analyst Highlights XRP Breakout Signal as Monthly Bollinger Bands Tightens

Renowned crypto analyst Charting Guy (CG) gave a compelling analysis of XRP's monthly Bollinger Bands (BB). According to CG, XRP Bollinger Bands have risen to a historical range with a width of 0.70 on the monthly timeframe. This is the tightest the BB has been since rising to 0.73 in 2017.

$XRP monthly bollinger bands are now the tightest they've ever been in history

0.70 for the width

the tightest it got before this was 0.73 in 2017.. 1 month before

probably nothing.. pic.twitter.com/SDk8Q2jj3F

- Charting Guy (@ChartingGuy) April 17, 2024

XRP suffered a significant retracement in the past week and is now trading around $0.49. However, CG's latest analysis suggests that the asset is recovering.

XRP Shows Breakout Signal Based on Bollinger Band Analysis

According to CG's chart, the XRP monthly Bollinger Band hit a historical high of 0.73 in February 2017. This value was recorded just before XRP's 65,900% price rally from a low of $0.005 to an all-time high of $3.3 in 2018.

For context, the Bollinger Band indicator is a powerful tool for determining price volatility for a particular asset. The wider the range of the Bollinger Band, the greater the volatility of the asset's market price.

However, when the range narrows, it implies a reduction in volatility. An uptick in prices for a given asset often precedes this range narrowing. Therefore, the 0.70 range, which surpasses the lowest range recorded for the asset, indicates a potential rally.

XRP has performed poorly since its rally to the previous all-time high. Investors have patiently anticipated another breakout, with some voicing their dissatisfaction over the asset's underperformance.

Reacting to CG's analysis, an X user, Car for Coin, said he will sell all XRP assets once their price rises between $3 and $7.

In response to the user's remark, CG noted that XRP is among the few coins with a long-term adoptable use case. He said he would take profit during an uptrend but never sell the whole bag.

Further, the analyst explained that his strategy is to sell 75% of his assets during a bull market peak and buy back aggressively during a bear market. These responses are based on concerns that XRP's price could also retrace, leading to further decline.

Again, CG noted that the 20-day Simple Moving Average (SMA) is progressing. This indicates that the average daily closing prices are increasing, signaling a possible uptrend. He boldly predicted that XRP's price would trade in the $5-$10 range by the end of 2024.

However, while these predictions appear attractive, they are highly speculative, and other risk factors, such as inflation, must be considered.

How is Ripple's Native Token Faring Today?

XRP has formed a red candle today as investors move into a sell-off position, prompting a price decline. It faces rejection at the $0.50 price level and is currently on the $0.48 support. A drop below this support level will push XRP into the oversold level.

The Bollinger Band is expanding, confirming rising price volatility in the XRP market, leading to a price decline. Also, the Relative Strength Index (RSI) indicator is dropping to the oversold region with a value of 32.05.

These signals suggest the sellers are in control. So, XRP's price will likely decline further in the coming days before the buyers enter the market and force a recovery.

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