XRP is on the brink of a potential explosive move, as its Bollinger BandWidth and Aroon indicators show historically accurate bullish signs.
XRP has faced a roadblock to its recent upsurge, but an analysis of past market trends suggests the recent rally might be a precursor for a more explosive one. This projection hinges on patterns observed in 2017-2018 and 2020-2021, where similar setups in Bollinger BandWidth and Aroon indicators led to massive rallies.
XRP Historical Data
Notably, in February 2017, XRP’s Bollinger BandWidth (BBW), which measures market volatility, hit a low of 73.40. Concurrently, the Aroon Up indicator, which tracks the strength of upward trends, fell to 71.43%, while the Aroon Down, indicating downward trends, rose to 92.86%.
This combination signaled a potential bottom for that cycle as XRP dropped to $0.005, a trend which occurred amid XRP’s underperformance. Remarkably, what followed was an unprecedented rally, with XRP surging by 66,100% from $0.005 to $3.31 in January 2018.
Interestingly, the scenario repeated in late 2020. In October of that year, the BBW dropped to 100.42. Also, XRP’s Aroon Up declined to 42.86%, while the Aroon Down increased to 50%. These readings again indicated a market poised for a significant move. By April 2021, XRP had skyrocketed by 795% from its bottom price to a peak of $1.96.
XRP Records Similar Setup
Now, XRP is exhibiting a similar technical setup this month. The Bollinger BandWidth has dropped to 65.69, the lowest in its history. This extremely low BBW suggests a period of very low volatility, typically a precursor to a sharp price move.
Simultaneously, the Aroon Up indicator has plummeted to 14.29%, while the Aroon Down has hit 100%. This observable divergence between the two Aroon indicators again points to a market bottoming out and preparing for a significant upward trend.
These indicators combined suggest that XRP is on the cusp of another massive rally. Historical data indicates that after such setups, XRP has seen extraordinary gains. Interestingly, like in previous cycles, XRP dropped below $0.4 to a recent low of $0.3824 this month.
An assessment of the average of the past cycles’ rallies brings a potential 33,448% surge. If XRP follows this pattern, it could climb from its recent low of $0.3824 to a remarkable $128.29.
Trends Supporting the Outlook
At the reporting time, XRP trades for $0.5678, showing a 19.46% increase in July. This recent uptick might be the beginning of the predicted upward trend. The current positioning of the indicators is in perfect sync with the patterns that preceded past rallies.
Moreover, the tightness of the Bollinger Bands in the monthly chart reinforces this analysis. Tight bands indicate low volatility and often precede substantial price moves. Meanwhile, Santiment data confirms that XRP is observing an accumulation trend among shark and whale addresses. This trend could support a price explosion.
Interestingly, data indicates that addresses holding between 100,000 and 10 million XRP have procured 130 million XRP since June. In addition, wallets holding at least 1 billion XRP have amassed a whopping 1.15 billion XRP within the same period.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
