XRP opened May with a decent price rebound after falling 28% in April, its worst monthly performance since June 2021. Furthermore, the XRP/USD pair shows prospects of continuing its recovery trend in the coming weeks.
Support confluence raises XRP bullish prospects
XRP’s price rose by nearly 6.25% in the first two days of May, going as high as $0.63 (data from Binance). The buying sentiment surged around $0.58, a level that acted as strong support in January 2022 and enabled XRP to rise by more than 50% thereafter.
XRP/USD daily price chart featuring support area around $0.58-level. Source: TradingView
Interestingly, the $0.58-support coincides with XRP’s 200-week exponential moving average (200-week EMA; the blue wave in the chart below).
It also serves as the lower trendline of a broader descending triangle pattern, a bearish indicator targeting $0.18 in the coming months.
XRP/USD weekly price chart featuring 200-week EMA and ‘descending triangle’ setup. Source: TradingView
But with XRP’s price bouncing from a confluence of support levels, its likelihood of retesting the triangle’s upper trendline is high. That would have the token test levels above $0.75 — up nearly 30% from today’s price — as their next resistance target in Q2/2022.
Buy the rumor
XRP has emerged as a speculative vehicle for traders looking to benefit from the ongoing SEC vs. Ripple case.
In December 2020, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple for conducting illegal securities sales via XRP. Nonetheless, recent hearings indicate that the case has been going relatively well for Ripple.
Record Growth
Majority of Ripple partners & volume exists outside of US
“already operating in worst case scenario”
SEC case going exceedingly well$XRP
Look at the Ripple Advisors & Board (e.g. 43rd US Treasurer, Former CFTC Chair, and now Michael Barr – Ripple Advisor…) https://t.co/9MhSctDjEQ pic.twitter.com/Z5HInHzSvJ
— Kevin Cage (@Kevin_Cage_) April 16, 2022
The SEC vs. Ripple case has dampened buying sentiment in the XRP market, given it is the only veteran token in the top-ten that has been unable to beat its 2017-2018 bull market highs. But analysts believe that Ripple’s win would drastically improve XRP’s upside prospects.
Related: Ripple CEO: SEC case is going ‘much better than I hoped’
“XRP investors could benefit immensely if Ripple is victorious in the war,” says Practical Crypto Capital, analyst at SeekingAlpha, albeit adding:
“Holders must watch for the news and be prepared; based on the examples from the past year, we can probably expect the gains to rapidly peak and then decline.”
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