XRP price experienced a difficult performance last week, slipping from a high of $2.50 to a low of $2.06 as Bitcoin and most altcoins crashed. It was its first weekly decline since the first week of March, when it crashed by almost 30%. Will Ripple break out of its tight range and rise to $5 this year?
XRP Price Technical Analysis
The weekly chart shows that the price of XRP has remained in a consolidation phase in the past few months. After rising to a high of $3.40 in January, the coin has retreated by 37% to the current $2.12. In this period, it has remained between the key support and resistance levels at $3.40 and $1.90.
On the positive side, the XRP price has remained above the 25-week moving average, a sign that bulls are in control. Also, it remains above the crucial support at $1.9035, the 50% Fibonacci Retracement level. That signals that short sellers are afraid of placing short bets below that price.
On the negative side, the Ripple price has formed a head-and-shoulders pattern on the daily chart, whose neckline is at $1.9035. This pattern is one of the riskiest ones in the market, and Peter Brandt has warned about it recently.
Therefore, a balanced XRP price forecast at this point is neutral. A break below the support at $1.9035 will validate the H&S pattern and point to more downside. It will signal that the coin has moved to the markdown phase of the Wyckoff Theory and indicate a potential decline to $1.
Conversely, a jump to $5 will only become clearer if the XRP price surges above the key resistance level at $3.40, the highest point this year. Moving above that level will signal that more buyers are still bullish on Ripple.
Risks and Opportunities for Ripple
As Ripple navigates its path towards $5, it faces both risks and opportunities. The biggest risk comes this week when significant events such as Donald Trump’s sparking a major trade war on Liberation Day occur. This trade war is a major black swan event that could tank risky assets.
These fears explain why the XRP coin price has recently reacted mildly to some positive news. Notably, it rose slightly after the SEC ended the Ripple lawsuit this month.
Further, XRP is a highly inflationary token with a circulating supply of 58.2 billion against a maximum supply of 100 billion tokens.
The main long-term opportunity for Ripple is the potential to disrupt SWIFT, a network that processes over $150 trillion a year. Ripple Labs argues that its technology is superior to the 50-year-old SWIFT; it is faster and more cost-efficient for banks.
Ripple’s main challenge has been its litigation with the SEC, which prevented companies from enrolling. Now that the case is over, there are signs that more big banks will partner with it soon.
The other potential XRP catalyst is the upcoming Securities and Exchange Commission approval of the Ripple ETF, which may lead to more inflows from institutional investors.
READ MORE: Ripple Agrees to Settle SEC Case With Reduced Fine and Lifted Injunction
