XRP experienced a significant price increase from $0.42 to $0.53 between April 13 and April 20. As the price approaches a sell-wall at $0.55, it raises the question of whether the bullish trend will continue in the coming days.
Despite the 8% price rally, XRP trading volume has been on the decline. On April 20, the price opened at $0.52, the highest for the week, marking a 25% recovery after the market crash on April 11. This recovery can be attributed to the bullish momentum from investors anticipating the positive effects of the recent Bitcoin halving event.
However, it is worth noting that the upward trend in XRP price has not been accompanied by a proportional increase in market liquidity. This has raised concerns of a potential bearish reversal. A chart from Santiment shows that XRP trading volume has been declining since April 12. On April 19, only $698.4 million worth of XRP was traded, compared to $1.48 billion on April 12. This decline in trading activity suggests a lack of conviction among market participants, which could lead to a bearish reversal if it continues.
Considering the decline in trading volume, it is likely that XRP price will experience a reversal towards the $0.50 territory. The Bollinger band indicator supports this prediction, as it shows a looming sell-wall at the $0.55 level. With lower market liquidity compared to previous instances of XRP falling below $0.55, maintaining upward momentum and reclaiming that territory could be challenging.
However, if a major downtrend occurs, there is a key support level at $0.45 indicated by the lower-limit Bollinger band. The presence of a substantial buy-wall at this level suggests that bears may face strong resistance to further downside movement.
In conclusion, while XRP has seen a significant price increase, the declining trading volume raises concerns of a potential bearish reversal. The current market conditions suggest that XRP price may reverse towards the $0.50 territory. Traders are advised to conduct thorough research before making any investment decisions, as this article is for informational purposes only and should not be considered financial advice.
