XRP may be laying the groundwork for a massive price explosion due to the historic Bollinger Bands compression.
This indicator, which measures price volatility, has in the past shown underlying patterns that often led to noticeable price explosions. Interestingly, current data suggests that XRP may be on the verge of another big move.
XRP Bollinger Band Historical Squeeze
For context, 2016 marked the beginning of a period for XRP Bollinger Bands A contraction that lasted from August 2016 to February 2017. At this time, XRP was in a consolidation phase, holding in a relatively stable range.
Once this period of compression ended, the price of XRP skyrocketed, one of the most impressive price surges in its history.
In the months following the squeeze, the value of XRP skyrocketed from $0.00555 to an all-time high of $3.31 by January 2018. This represents growth of almost 60,000% year over year.
After this huge price increase, XRP began to recover and by May 2020, another Bollinger Bands squeeze began. This squeeze continued until October 2020 when XRP upgraded. upward momentum.
However, XRP’s price rise faced a major challenge when the US Securities and Exchange Commission (SEC) filed a lawsuit against Ripple in December 2020. The lawsuit led to a sudden drop in the price of XRP, with it falling 66.97% in December after falling 177.23%. rally in November.
Despite the failure XRP price did not remain stagnant for long. After the initial impact of the lawsuit, XRP resumed its bullish trajectory and reached a cyclical peak of $1.96 in April 2021. This represents a 717% gain from the low point, achieved despite legal challenges.
XRP now faces new pressure
Many analysts believe that the price of XRP could have risen even higher and potentially surpassed the January 2018 all-time high of $3.31 if not for the legal issues surrounding the SEC case.
Now the XRP Bollinger Bands are experiencing another squeeze that began in December 2023 and lasted almost a year. This is currently the longest squeeze in XRP history, and longer squeezes often signal sharper price movements.
However, it remains unclear whether this breakout will lead to a significant rise or a sharp decline. The extended squeeze has caught the attention of market analysts and XRP investors, who are closely watching for any signs of a breakout.
Another indicator that can help predict XRP’s upcoming move is the relative strength index (RSI) on the monthly chart. Historically, the RSI has also shown patterns preceding XRP Breakouts.
During previous Bollinger Band squeezes, XRP’s monthly RSI was typically in the range of 48 to 51. However, just before the breakout, the RSI dropped to almost 47.
This pattern occurred in February 2017, shortly before the XRP price surge, with an RSI level of 47.18. This happened again in October 2020 when the RSI dropped to 47.51, just as XRP began its uptrend.
Currently, XRP’s RSI is hovering around 48.41 and the price is trading at $0.5122. A fall towards 47 could be a signal that XRP is on the verge of a breakout. However, if the situation continues, the XRP price may experience a short-term decline before the expected upward move occurs.
