Key Takeaways:
- XRP recorded its best day since April 2021 after rising 27%.
- The rally took cues from the euphoria around the SEC vs. Ripple court case.
- A mysterious $500M whale transaction could be behind the move.
YEREVAN (CoinChapter.com) — XRP exploded to record its best daily performance since April 2021, ignoring the rate hike FUD and its wider impact on the cryptocurrency market.
The XRP price surged more than 27% to reach $0.5 a token on Sep. 22, the highest level in four months. Its intraday rally accompanied a spike in trading volume, hinting at traders’ strong conviction behind the bullish move.
XRP’s price boom also surfaced in line with similar upside moves elsewhere in the cryptocurrency market. Nonetheless, the token outperformed its top-ranking rivals, mainly Bitcoin (BTC) and Ethereum (ETH), which surged 5% and 6% on the same day.
What pumped XRP?
At first, the major XRP price rise appears to have originated from the euphoria surrounding the ongoing SEC vs. Ripple case.
In detail, Ripple Labs, the San Fransico-based blockchain payment company, filed a motion of summary judgment with the court last week to decide whether or not XRP is a security asset. In doing so, the firm requested the court to reach a verdict based on the available pieces of evidence.
Social media picked the event as a possibility that Ripple might end up winning the court case against the U.S. Securities and Exchange Commission (SEC), given the securities regulators have failed to offer concrete evidence on XRP’s status.
XRP’s price rally came a day after a mysterious token transfer worth $500 million between two anonymous wallets, as Cointelegraph covered here. It suggests whale could have been buying XRP tokens in anticipation of a Ripple win.
Bullish continuation or trap?
The XRP’s intraday pump occurred alongside its daily relative strength index (RSI) crossing into its “overbought” territory. As a rule of technical analysis, an overbought RSI suggests a short-term correction could be underway.
From a technical perspective, XRP broke out of a symmetrical triangle at the end of a downtrend, suggesting a bullish reversal. Therefore, the token’s likelihood of rising by as much as the triangle’s height—when measured from the breakout point—is high.
That puts its interim upside target near $0.55, about 14% above the current price levels. Meanwhile, an extended bullish move could have the token test $0.69 as its primary upside target.
Conversely, bullish exhaustion could have traders test $0.44 as interim support, which, if broken to the downside, would re-activate the symmetrical triangle’s bearish continuation setup, as shown below.
In other words, the token could fall to $0.22 in 2022, down more than 50% from current price levels.
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