Following a federal court ruling that deemed the sale of XRP compliant with US securities laws, XRP (XRP) experienced a significant price spike. Despite a small pullback on July 14 with a 10% drop to $0.76, XRP maintained a significant 65% gain compared to the previous day’s low.
Over the past 24 hours, the XRP/USD pair hit a high of $0.93, marking its strongest run since December 2021, barely breaking the $1 mark. The continued spike in XRP’s price has a more significant factor beyond the short-term reaction to the positive news about Ripple.
The indicator shows the involvement of the important players driving this rally. The duration of the substantial XRP price increase is in line with the highest trading volume in 10 months. Moreover, the number of Whale XRP transactions involving wallets holding more than $100,000 peaked in 2023, showing support from wealthy investors. XRP accumulation by the whales during this rally signals their intent to position themselves for further gains. Entities holding a balance of 100,000 to 10 million XRP tokens have also increased their supply, further strengthening this notion.
However, while XRP could test the key $1 in the coming days, its rally beyond that level appears to be weak. The pullback on July 14 coincided with the confluence of resistance formed by the long-term horizontal trendline and the ceiling of the descending trendline. Additionally, the weekly relative strength index (RSI) for XRP has entered overbought territory, increasing the likelihood of a correction.
In the event of a pullback, XRP price could decline towards its rising trend line support near $0.45 in September, representing a 55% drop from the current price level. Alternatively, an overbought RSI could result in XRP price consolidating within the $0.75-$1 range.
If XRP price manages to cross the $1 mark, its next target in September will likely be around $1.35, the resistance level observed from August to December 2021.
As XRP continues its upward trajectory, it will face challenges, including a potential level of resistance and a possible correction due to an overbought RSI. Investors and traders should closely monitor these factors and exercise caution when deciding in the volatile cryptocurrency market.