XRP may be laying the groundwork for a massive price explosion due to a historical squeeze in its Bollinger Bands.
This indicator, which measures price volatility, has shown major patterns in the past that have often led to notable price explosions. Interestingly, the current data suggests that XRP might be on the verge of another big movement.
XRP Historical Bollinger Band Squeeze
For context, in 2016, XRP began a period of Bollinger Bands compression that lasted from August 2016 to February 2017. During this time, XRP was in a consolidation phase, holding within a relatively stable range.
Once this squeeze period concluded, XRP’s price skyrocketed, marking one of the most impressive price surges in its history.
In the months following the squeeze, XRP’s value rose dramatically from $0.00555 to an all-time high of $3.31 by January 2018. This marked an increase of nearly 60,000% within a year.
After this massive price rise, XRP began to retrace, and by May 2020, another Bollinger Bands squeeze was underway. This squeeze persisted until October 2020, when XRP saw renewed upward momentum.
However, XRP’s price rally faced a major challenge when the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple in December 2020. This lawsuit led to a sudden drop in XRP’s price, with a 66.97% decline in December following a 177.23% rally in November.
Despite the setback, XRP’s price did not remain stagnant for long. Following the lawsuit’s initial impact, XRP resumed its bullish trajectory and reached a cycle peak of $1.96 in April 2021. This represented a 717% gain from its low point, achieved despite the legal issues.
XRP Now Facing Another Squeeze
Many analysts believe that XRP’s price could have climbed even higher and potentially exceeded its January 2018 all-time high of $3.31 if not for the legal challenges stemming from the SEC case.
Now, XRP’s Bollinger Bands are experiencing another squeeze, which began in December 2023 and has continued for nearly a year. This is currently the longest squeeze in XRP’s history, and long squeezes often signal more dramatic price movements.
However, whether this breakout will lead to a significant rally or a sharp decline remains uncertain. The extended squeeze has captured the attention of market analysts and XRP investors, who are closely watching for any signs of a breakout.
Another indicator that could help predict XRP’s upcoming movement is the Relative Strength Index (RSI) on the monthly chart. Historically, the RSI has also shown patterns preceding XRP breakouts.
During previous Bollinger Bands squeezes, XRP’s monthly RSI typically ranged between 48 and 51. Right before a breakout, however, the RSI would drop close to 47.
This pattern occurred in February 2017, just before XRP’s price surged, with an RSI level of 47.18. It happened again in October 2020 when the RSI dropped to 47.51, just as XRP began its upward trend.
At present, XRP’s RSI is hovering around 48.41, with the price trading for $0.5122. A dip toward the 47 level could serve as a signal that XRP is on the brink of a breakout. However, if the pattern holds, XRP’s price may face a brief decline before this anticipated upward move takes place.