The bounce move has occurred near a technical support confluence, raising the possibility of XRP rising 30% in Q2/2022.
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.
The price of XRP rose by almost 6.25% in the first two days of May, reaching $0.63 (Binance data).
Confluence of Supports Raises Bullish Outlook for XRP
Buying sentiment emerged around $0.58, a level that acted as strong support in January 2022 and allowed XRP to rise more than 50% thereafter.
Interestingly, the support at $0.58 coincides with the 200-week exponential moving average of XRP.
It also serves as the lower trend line of a broader descending triangle pattern, a bearish indicator pointing to $0.18 in the coming months.
As XRP price bounces off a confluence of support levels, its probability of retesting the upper trend line of the triangle is high. That would see the token testing levels above $0.75 — a nearly 30% rise from the current price — as its next resistance target in Q2 2022.
Buying amid Rumors
XRP has emerged as a speculative vehicle for traders looking to profit from the ongoing SEC case against Ripple.
In December 2020, the United States Securities and Exchange Commission (SEC) filed a lawsuit against Ripple for making illegal sales of securities through XRP. However, recent hearings indicate that the case has gone relatively well for Ripple.
It is worth recalling that last February, Alexander Mamasidikov, co-founder of cryptocurrency wallet service MinePlex, ignored bearish warnings, claiming that the end of a long court battle between the SEC and Ripple would be bullish for XRP.
“With anticipation that the SEC-induced legal battle alleging XRP’s status as a security will be resolved this year, current purchases may be seen as an avenue to stack up at a discount for a potential longer-term price rally,” Mamasidikov has said then; it appears that he was right.
On Twitter, Kevin Page, crypto investor, and advisor posted the following:
“Record Growth. Majority of Ripple partners & volume exist outside of the US “already operating in worst-case scenario. SEC case going exceedingly well. Look at the Ripple Advisors & Board (e.g. 43rd US Treasurer, Former CFTC Chair, and now Michael Barr – Ripple Advisor…).”
SEC against Ripple and its Repercussions
The SEC case against Ripple has dampened buying sentiment in the XRP market, as it is the only veteran token, in the top ten, which has failed to break above its 2017-2018 bull market highs. Nevertheless, analysts believe that Ripple’s victory would dramatically improve XRP’s bullish outlook.
“XRP investors could benefit immensely if Ripple emerges victorious in the war,” says SeekingAlpha analyst Practical Crypto Capital.
The analysts then added that “holders should watch the news and be prepared; based on the examples of the past year, we can probably expect earnings to quickly peak and then taper off.”
By Audy Castaneda
