Key Metric Signals ‘Sell’ After Recent Rally

TL;DR

• XRP hit a multi-year high of $3.20 before retracing below $3.10. Despite bullish momentum, the RSI crossing above 70 signals a potential correction.
• Analysts predict XRP could reach $4-$10, with the Ripple-SEC lawsuit and upcoming SEC leadership change being critical factors for future price movements.

The Bearish Factor

Ripple’s XRP has been crypto’s rockstar lately, with its price reaching multi-year peaks. Several hours ago, the valuation skyrocketed to $3.20, representing the highest level observed since the beginning of 2018. In the following hours, XRP lost some steam and is currently trading at around $3.05 (per CoinGecko’s data).

Despite the bullish landscape and the overall expectations of a further pump, one indicator suggests an incoming correction. This is the Relative Strength Index (RSI), which measures the speed and change of price movements. 

It varies from 0 to 100, helping traders identify potential price reversals. Readings above 70 typically signal that the asset is overbought and could be due for a pullback. On the contrary, anything below 30 might be considered a buying opportunity. The RSI has been hovering above 40 since the beginning of the week but most recently crossed the bearish zone of 70.

XRP Price Predictions

As mentioned above, multiple analysts expect XRP’s value to keep climbing after exceeding the $3 level. The popular X user CRYPTOWZRD believes the asset could hit $4 in the short term, while Ali Martinez was even more optimistic, setting a target of $10. 

One major factor that could affect XRP’s future price fluctuations is the development of the lawsuit between Ripple and the US Securities and Exchange Commission (SEC).

The agency recently filed its first opening brief as part of its appeal against a court ruling concerning the XRP sold to retail investors on exchanges years ago. It also insisted (once again) that Ripple’s native token should be classified as a security.

The SEC has been quite hostile toward the company (and many other crypto businesses) over the past few years. However, the upcoming shift in its leadership may end that approach. 

The current Chairman, Gary Gensler (considered a huge enemy of the digital asset industry), will resign on January 20 and be succeeded by the pro-crypto Paul Atkins. The XRP Army expects the new leader to push the case against Ripple to a favorable resolution soon. However, considering the complexity of the entire legal process, they should have somewhat realistic hopes.