XRP Price Continues Trading Above 720-Day Support – Will Volatility Ever Return?
When Will XRP Volatility Return? | Credit: Derek Fenech
Key Takeaways
- The XRP price has increased alongside an ascending support trend line for 720-days.
- Volatility has approached its lowest-ever levels, similar to an 805-day period in 2018-2020.
- What are the key levels that the XRP price needs to break in order for volatility to return?
The XRP price has declined since its $0.94 high in July 2023. It is one of the few cryptocurrencies who’s 2024 high was lower than that of 2023. This is the continuation of a pattern of weakness, since XRP’s all-time high was reached in 2018, and the price created a lower high in 2021.
XRP is approaching the end of a long-term pattern existing since that 2021 high. This leads to the question: Will the XRP price break out or down from this pattern?
XRP Trades Without Volatility
The weekly time frame chart shows the XRP price has traded above an ascending support trend line since July 2022. The trend line has been validated numerous times.
In April 2024, the price of XRP seemingly broke down below it. However, it created a long lower wick (green icon) and reclaimed the trend line the same week. It has increased at the same rate at the trend line since, devoid of any notable volatility.
The fact that the price has traded without volatility is also supported by the narrowing Bollinger Bands indicator. The indicator creates an upper and a lower limit based on the current price volatility.
XRP is trading near the lower portion of the band. The lack of volatility is also visible by the historical volatility indicator, currently at 40. The indicator has consistently fallen since the start of 2022.
The only other time when XRP had such a low volatility was an 805-day period between September 2018 and November 2020. However, besides the lack of volatility, there are no other similarities between these two movements.
In 2018-2020, the XRP price had been trending downward inside a descending parallel channel, as opposed to increasing alongside an ascending support trend line, as it is currently doing.
What to Make of XRP’s Future Movement?
A more extensive look at the weekly chart shows the price also trades inside the $0.52 horizontal support area, which coincides with the ascending support trend line. Additionally, it shows a descending resistance trend line existing since the April 2021 high.
Together, they create a symmetrical triangle. The resistance and support trend lines converge in September, so a decisive movement is likely by then.
However, the weekly RSI and MACD do not point to a clear direction. The MACD is below 0 and the RSI is below 50. While both are mired in long-term downward trends, they have also begun short-term upward trends.
When combined with the fact that the symmetrical triangle is a neutral pattern, the readings make both a breakout and a breakdown equally possible.
Future XRP Trend Remains Unclear
The fact that the XRP price has traded without volatility for such a long period of time suggests a significant movement is likely. The fact that the existing long-term pattern will end in September supports this.
However, neither the XRP price action nor indicator readings particularly lean in one or the other direction. Since there is a confluence of support levels but the same is not true for resistances, upside volatility is slightly more likely.
A breakout above the descending resistance trend line will likely lead to an upward movement, while a breakdown below the $0.52 horizontal support and the ascending support trend line can lead to lower prices.
