XRP, finally close to '$2'... Warning of 'early rally termination' amid overheating signs

▲ XRP (XRP)/ChatGPT generated image

XRP is continuing a strong rebound trend, aiming for the $2 mark. However, warnings have emerged that the rally could end earlier than expected due to major technical resistance levels and signs of indicator overheating.

According to cryptocurrency specialized media Benzinga on April 21 (local time), XRP has been drawing a gentle upward curve in recent days, attempting to reclaim the psychological threshold of $2. XRP is currently trading around $1.43, having risen about 2% over the past 24 hours. Investors are seeing the expansion of the Ripple ecosystem and increased institutional interest as drivers for the rise. However, the charts show signs of fatigue from the short-term surge in various places, indicating that a cautious approach is required.

Analysts have identified the $1.50 and $1.55 range as the strongest short-term resistance barrier. $1.50 is both a psychological resistance level and the location of the Fibonacci 50% retracement line. Additionally, the 100-day exponential moving average is acting as resistance at $1.55, and if it fails to break through this decisively, the upward momentum is likely to falter. If the price is pushed back from this range, selling pressure could intensify towards the support level between $1.30 and $1.35.

Auxiliary indicators such as the Relative Strength Index (RSI) are also signaling an early end to the rally. Currently, the RSI on the 4-hour chart is at 65, approaching the overbought zone. This signifies that buying pressure has peaked and is a risky area where profit-taking might flood the market. The On-Balance Volume (OBV) indicator also shows a divergence in trading volume, where buying volume is not sufficiently supporting the price increase. Discrepancies in technical indicators are typically interpreted as reversal signals.

While investor sentiment across the virtual asset market is recovering, Bitcoin (BTC)'s movement acts as a variable. If Bitcoin fails to establish a stable support base around the $76,000 mark, liquidity in the altcoin market, including XRP, could dry up rapidly. There are also analyses suggesting that investors might adopt a wait-and-see approach until the results of the roundtable related to the US crypto market structure bill (CLARITY) are announced. The point is that excessive short-term optimism could instead become detrimental.

For XRP to enter a true bull market, it needs to close its daily candle above $1.55 and establish itself there. To achieve the ambitious goal of $2, there is also the challenging process of breaking through the 200-day exponential moving average of $1.80. It is expected that it will soon be determined whether the current rally is a foundation for sustainable growth or a temporary rebound. Investors should closely monitor changes in trading volume at key resistance levels and indicator trends, rather than getting excited about price increases.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*