XRP, the fourth largest cryptocurrency by market capitalization, rose by 2.1% to $0.52 on April 11, extending its daily gains from the previous day alongside a broader crypto market rally. Traders are pinning hopes on easing inflation data into April 12, while lacklustre volumes accompanying XRP’s gains have hinted at potential price correction in the future.
XRP’s upside move has brought it closer to breaking out of its prevailing bull pennant range, with a price target of $0.65. However, a short-term pullback towards the pennant’s lower trendline near $0.51 in April, or a broader correction altogether invalidating the bullish continuation setup, could be on the horizon.
If the latter occurs, the extended sell-off scenario will be visible on the weekly chart, wherein a key resistance-turned-support line has limited XRP’s upside prospects. If the fractal plays out again, XRP’s price will risk falling toward its multimonth ascending trendline support near $0.40 by May, down about 25% from current price levels.
The XRP price has soared by nearly 55% in 2021 primarily due to anticipations that Ripple will win the lawsuit against it by the United States Securities and Exchange Commission (SEC). This comes as no surprise since XRP’s fate has been hanging in the balance since last year when the SEC filed a lawsuit against Ripple, alleging the sale of unregistered securities amounting to $1.3 billion in XRP.
XRP’s 43% rise in March was among the most significant price movements due to investors speculating that the ruling would come out by the end of March, which it did not. Simultaneously, the Google search score for the keyword “SEC vs. Ripple” declined from its March peak of 100, a perfect score, to 56 in the week ending April 8.
Moreover, “XRP” social volumes also dropped from their March highs, according to data tracked by Santiment. Lastly, XRP remains in lockstep with Bitcoin (BTC) on a daily timeframe, but risks a correction to $25,000 due to rate hike risks, putting XRP and other altcoins in danger of losses as well.
In conclusion, while XRP’s price has been buoyant in recent months, it remains volatile depending on the outcome of the lawsuit against it by the SEC. Investors are advised to conduct their own research carefully and not rely on any investment advice or recommendations before making any investment and trading moves.
