The price of XRP has created a substantial doji candlestick pattern, indicating a potential relief rally following some favorable news about Ripple.
Ripple (XRP) recently tested the significant resistance level at $2, marking an increase of approximately 20% from its lowest point this week. However, it still trails about 43% behind its peak this year.
One prominent piece of XRP news came from Standard Chartered, which projected that the coin could soar from $2 to $12 over the next four years. If this occurs, Ripple’s market cap would rise from the current $113 billion to more than $600 billion, assuming no change in supply.
Experts have noted Ripple’s increasing influence in the cross-border payment arena, which has been largely controlled by SWIFT. Ripple has positioned its service as being more transparent, quicker, and more affordable. In comparison, a typical SWIFT transaction can cost between $20 and $50, while Ripple charges less than $1. Furthermore, Ripple transactions are completed instantly, whereas SWIFT transfers can take significantly longer.
In a recent discussion, Brad Garlinghouse, Ripple’s CEO, remarked that the conclusion of the SEC case has resulted in an uptick in partnerships with U.S. firms. Many of these companies had steered clear of Ripple during the lawsuit, causing the firm to forge more alliances with international businesses.
Standard Chartered also pointed to Ripple’s advancements in the stablecoin market. Its RLUSD token has achieved a market cap of nearly $300 million, with Ripple incorporating RLUSD into its payment network just last week.
Another significant update for Ripple was its announcement to acquire Hidden Road for $1.25 billion. This acquisition is expected to enhance Ripple’s reach within institutional markets by leveraging Hidden Road’s established client base.
XRP Price Technical Analysis Amid Doji Candle Formation
On the daily chart, XRP dropped to a low of $1.6145 on Monday, marking its lowest level since November and coinciding with the 50% Fibonacci Retracement level. This decline occurred alongside a broader downturn in crypto markets due to ongoing trading uncertainties.
After the sell-off, XRP established a large doji candlestick, typically characterized by elongated upper and lower shadows with a small real body. This pattern often suggests a potential trend reversal, explaining the token’s rebound towards the crucial $2 mark.
Nevertheless, XRP’s price still confronts significant risks moving forward. For instance, there’s a possibility that this rebound is merely a temporary uptick or a bull trap. Such price movements typically lead to further declines.
Another risk involves a break-and-retest scenario, where an asset falls below a critical support level and then attempts to retest it from below. In this instance, XRP’s retest of $2, which serves as the neckline of a bearish head and shoulders pattern that developed between November and this week, could signal further downside to come.
Lastly, XRP has already experienced a death cross, with its 50-day moving average slipping below the 200-day moving average. This bearish indicator suggests that the downtrend could resume, potentially driving the price below $1 in the short term before any eventual recovery.