- XRP could take some time to consolidate around $0.42 before another leg higher.
- The range breakout and retest fueled strong optimism.
After consolidating within a range since November, Ripple [XRP] saw a violent breakout past important resistance levels on Tuesday. This showed strong bullish sentiment behind the asset, a fact supported by the technical indicators.
Read Ripple’s [XRP] Price Prediction 2023-24
A recent report highlighted that XRP is becoming easier to use and even has NFT capability added to the XRP Ledger. Could this help maintain the bullish sentiment?
The breakout past $0.42 occurred on heavy volume and promised further gains
The former range extended from $0.33 to $0.42, with the mid-point at $0.377. The breakout occurred on 21 March, and the range highs were also retested. This was a classic case of support-to-resistance, and it happened in the one-day timeframe, which added to its significance.
The $0.45 and $0.51 resistance levels to the north can temporarily halt the bullish advance of XRP. Rejection and a shift in structure to bearish on the four-hour chart were also possible and can be used as an early indication that the breakout had lost strength.
The RSI was at 61.5 and showed strong bullish momentum. The OBV had been rising even before the breakout and presaged the upward move. To the south, the $0.42 level itself, as well as the imbalance in the $0.39-$0.4 region, can be used to buy XRP. Yet, a decline to the $0.39 level in the coming days would be a sign of weakness from the buyers.
MVRV ratio corrects after three-month highs
The 90-day MVRV ratio reached a three-month high during the surge to indicate holders were at an enormous profit. This was followed by a wave of selling, shown by the retest of the range highs on the price charts. Even after some selling pressure, the MVRV ratio was still higher than it had been at any point since late December, excluding 21 March.
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The 90-day mean coin age metric was also in decline over the past week, showing increased transfer of XRP among addresses. The 90-day dormant circulation also saw a spike on 21 March. Together, they indicated some selling pressure in recent days.
The highly positive MVRV meant some more selling could follow, and traders should shy away from blindly bidding for XRP at press time market prices.
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