The bounce-back move has occurred near a technical support confluence, raising XRP’s possibility to rise 30% in Q2/2022.
Ripple (XRP) opened in May with a decent price rebound after falling 28% in April, its worst monthly performance since June 2021. Furthermore, the XRP/USD pair shows prospects of continuing its recovery trend in the coming weeks.
Support confluence raises XRP bullish prospects
XRP’s price rose by nearly 6.25% in the first two days of May, going as high as $0.63 (data from Binance). The buying sentiment surged around $0.58, a level that acted as strong support in January 2022 and enabled XRP to rise by more than 50% thereafter.
Interestingly, the $0.58-support coincides with XRP’s 200-week exponential moving average (200-week EMA; the blue wave in the chart below).
It also serves as the lower trendline of a broader descending triangle pattern, a bearish indicator targeting $0.18 in the coming months.
But with XRP’s price bouncing from a confluence of support levels, its likelihood of retesting the triangle’s upper trendline is high. That would have the token test levels above $0.75 — up nearly 30% from today’s price — as their next resistance target in Q2/2022.
Buy the rumor
XRP has emerged as a speculative vehicle for traders looking to benefit from the ongoing SEC vs. Ripple case.
In December 2020, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple for conducting illegal securities sales via XRP. Nonetheless, recent hearings indicate that the case has been going relatively well for Ripple.
The SEC vs. Ripple case has dampened buying sentiment in the XRP market, given it is the only veteran token in the top ten that has been unable to beat its 2017–2018 bull market highs. But analysts believe that Ripple’s win would drastically improve XRP’s upside prospects.
“XRP investors could benefit immensely if Ripple is victorious in the war,” says Practical Crypto Capital, an analyst at SeekingAlpha, albeit adding:
“Holders must watch for the news and be prepared; based on the examples from the past year, we can probably expect the gains to rapidly peak and then decline.”
This article was originally published on cointelegraph.com