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The popular cryptocurrency XRP is about to start the new year with a bang, specifically a 25% price spike. While not set in stone like everything else on the crypto market, this is at least what the Bollinger Bands suggest.
Developed by renowned trader John Bollinger, the indicator consists of the median and two lines that represent a deviation above and beyond that median — usually a 20-day moving average. With these two bands and a median, a price range is formed in which investors can estimate if the token is currently oversold or overbought. It is also a good indicator of important support and resistance levels for the price.
Arman ShirinyanFor example, looking at the daily price chart of XRP, one can see how the popular cryptocurrency recently reached the lower band at $2. After this happened, the bulls recharged and we saw a buying reaction that pushed the price of XRP up by 2% today.
Considering the fact that XRP reached the edge of oversold territory on a high time frame and buyers showed their appetite to buy the token there, we can say that the asset has reached its local bottom.
Gamza KhanzadaevNow, looking at what's next, the most logical thought is a test of the upper band that currently stretches to $2.55. If XRP does indeed make such a move, it could result in a rise of almost 25% from the current price.
There is still an obstacle in the form of the median, currently at $2.275, where those who bought the recent dip may take some profits. However, if the median is also breached, it will further solidify the bullish bias for XRP.
Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.
Alex Dovbnya
Vladislav Sopov
Dan Burgin