A market analyst suggests XRP could rally to one of three different bullish targets depending on whether it “hits, misses or overshoots” an important regression line.
Currently, XRP continues to battle for the $3 mark amid prevailing market uncertainties. While most traders anticipate the next move, one analyst has presented a commentary that points to potential price targets at $18, $27, or even as high as $200.
The Regression Line
Analyst EGRAG based his forecast on linear regression analysis on a logarithmic scale. According to him, XRP’s target for the forthcoming bullish push would depend on whether it hits the upper regression line, misses it, or overshoots above the line.
Notably, his analysis leverages the R-squared value of the regression model, which measures how closely the data fits the regression line.
EGRAG noted that the current R-squared value stands at 0.84754. This means the model explains roughly 84.75% of the variance in XRP’s movement, suggesting a highly reliable fit between historical data and the projection. He explained that values closer to 1 represent a stronger correlation, while 0 means no correlation at all.
Historical XRP Interactions with the Regression Line
From this, the analyst moved to XRP’s technical history. He observed that XRP has touched the upper boundary of the regression channel three different times. Specifically, the first instance came in December 2013, when XRP climbed to $0.0614 at the height of that year’s bull run.
Meanwhile, during the 2017/2018 cycle, XRP interacted with the line on multiple occasions. Notably, it first touched it in May 2017 when prices rose to $0.3988. After a six-month pause, XRP surged again in December 2017 and broke past the upper regression line by 570% when it hit $3.31 in January 2018.
Following that peak, XRP corrected and later rallied once more, this time reaching $0.7644, again touching the line before the cycle ended. Essentially, in 2017/2018, XRP touched the line twice and shot above it by 570% once.
Also, data from EGRAG’s chart shows that the 2020/2021 bull market played out differently. In April 2021, XRP attempted another push toward the regression line but fell short by 45%, topping out at $1.96.
Market participants at the time pointed to the U.S. Securities and Exchange Commission’s lawsuit against Ripple, which began in December 2020, as a factor that contributed to this disappointing performance. Notably, the lawsuit triggered selling pressure and forced American and Canadian exchanges to delist XRP.
XRP Could Reach $18, $27, or $200
Now, EGRAG has applied these lessons to the present market. As XRP currently trades around $2.98, close to the midpoint of the regression, it could follow one of three different scenarios from here.
If it successfully hits the regression line, the projection points toward $27. However, should it repeat the 45% shortfall from 2021 when it missed, the target drops to $18. On the other hand, if XRP manages another dramatic breakout like the 2017 overshoot, then a 570% extension could lift the price toward $200. This test could occur in September, per data from EGRAG’s chart.
The chart also highlights the 21-period exponential moving average. Historically, XRP has maintained trading action above this indicator during its major bull runs. At present, the 21 EMA sits at $1.71, with XRP comfortably positioned above it.
DisClamier: 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 opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
