XRP price bounced back from its July lows but some indicators are starting to suggest that the rally is due for a pullback
XRP price has almost rallied to three-month highs after resuming a solid uptrend on August 14th. However, its wild weekly rally posed an overvaluation risk, hence increasing the likelihood of an impending price drop. At press time, XRP is changing hands at $1.2.
XRP/USD 4-hour chart | Source: TradingView
XRP price triggers sell-off warning after price explodes by 54% in one week
Not long ago, XRP jumped 11.78% higher to hit $1.2 for the first time since May 22nd. The pair’s gains come as part of a popular uptrend that started. On July 20th, it was trading as low as $0.154 – a 134% upside retracement on the whole. In the past week, XRP has increased by almost 54%.
The latest bullish moves in the XRP market have prompted the indicator to forecast an impending price correction. First, the Relative Strength Indicator (RSI) triggered warnings of excessive valuations after its readings crossed 70.
XRP/USD daily price chart featuring RSI indicator | Source: TradingView
Despite overvaluation risks, other traders believe XRP is poised to continue its bull run. For instance, independent market analyst DonAlt thinks XRP could sprint towards its all-time high merely because it has broken above a so-called resistance area, as shown in the chart below.
XRP/USD daily chart BitFinex | Source: TradingView, DonAlt
XRP price at its all-time high would mean that Ripple has settled with the United States Securities and Exchange Commission (SEC). The SEC filed a lawsuit against Ripple in December 2020, alleging that the latter engaged in this illegal securities offering via the sale of XRP in 2013 and afterward. Ripple denied the allegations.
As AZCoin News reported, on August 16, Ripple will respond to the motion filed by the SEC for the discovery of “terabytes” of Slack communication data. The documents, if filed, may shed more light on whether or not Ripple sold XRP to its investors as securities.
— James K. Filan ???? (@FilanLaw) August 12, 2021
While everything looked suitable for the sixth-ranked alt, it will be best to look out for warning signs like the decline in the active addresses or low trade candles on high prices. Especially, keeping in mind XRP’s almost 10% price fall on August 12, it will be crucial to watch necessary levels like the $0.8.
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