XRP, the popular cryptocurrency associated with blockchain company Ripple, is showing ominous signs of a potential market correction.
This follows the detection of what analysts term a bearish divergence, according to the popular 100eyes Crypto Scanner on Twitter.
In technical analysis, a bearish divergence occurs when the price of an asset such as XRP reaches a new high, but the relative strength index (RSI), a momentum indicator, fails to achieve a corresponding new high and shows a decrease.
This divergence between the asset's price and its RSI is often interpreted as a sign that the bullish momentum is weakening, potentially leading to a price correction or even a full-blown bearish trend.
The price of XRP as of May 23 is sitting at $0.46 after recording a minor increase of 3.3% in the last 24 hours.
Adding to the uncertainty around XRP's price trajectory, Evai CEO Matthew Dixon recently predicted a significant price drop for the digital asset, potentially falling as low as $0.34, before a significant rebound above $0.60. Dixon, known for his use of the Elliot Wave Theory, suggests that this volatility could offer high-risk high-reward trading opportunities.
As reported by U.Today, Ripple CEO Brad Garlinghouse recently predicted a speedy resolution to the SEC case. The resolution of the case, which has been a considerable overhang for Ripple, could sway the price of XRP in a significant manner. Hence, in the upcoming weeks, XRP's path seems fraught with both potential setbacks and opportunities.