XRP, Super-compression in Years... Direction Decided in One Go When It Breaks

▲ XRP, USD

An analysis suggests that XRP has entered its narrowest Bollinger Band compression in years, indicating a large volatility ahead.

TheCryptoBasic reported on May 5 (local time), citing an analysis by Bitcoin analyst Seth, that XRP recorded its strongest Bollinger Band compression since 2026. Bollinger Band compression is a phenomenon where price volatility becomes extremely low and the band width narrows, typically observed as a technical signal before a strong directional movement emerges. However, the compression itself does not confirm an upward or downward direction, and an increase in trading volume and a breakthrough of key price levels must be confirmed.

After a long-term downtrend, XRP has been consolidating in a narrow range, with no clear market direction. TheCryptoBasic suggested that this trend could either be an accumulation phase or a stagnation phase before further bearish movement. Bulls interpret the recent stable trend as preparation for an upward move, while bears believe that the long-term downtrend structure has not yet fully concluded.

From a technical perspective, key resistance levels were suggested around the Fibonacci 0.618 retracement level of $1.6677 and $2. An analysis also indicated that if upward momentum strengthens, additional targets could open up to the $2.40 and $2.90 ranges. Conversely, on the downside, the Fibonacci 0.786 retracement level of $1.25 was identified as a major support level. If this level breaks, the possibility of a decline to $1.10 could increase.

The volume profile also showed concentrated trading around the current price level. This is interpreted to mean that market participants are strongly building positions or awaiting a directional move in this range. TheCryptoBasic reported that XRP is approaching a volatility expansion phase, and the next move could be stronger than usual.

Bullish outlooks continue in the market. Analyst ChiefraT suggested the possibility of XRP reaching a market cap of $500 billion and $8, based on a cup-and-handle pattern. Long-term investor Nepentia argued that XRP has entered an accumulation phase after a 70% decline from its peak. He cited the fact that Binance reserves increased near past highs and then recently stabilized as a basis for the possibility of easing selling pressure.

However, not all analyses point to an immediate bullish breakout. Bullish analyst ChartNerd also considered the possibility that XRP could drop below $1 one more time before a strong upward trend begins. Ultimately, the key variable for XRP currently is in which direction this multi-year compression phase will resolve. A breakthrough of the $1.6677 and $2 resistance levels could strengthen a bullish scenario, but if the $1.25 support level breaks, additional downward pressure could increase.

*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.*