XRP is likely to lower towards $2 before targeting the new ATH

XRP has experienced an explosive rise, breaking through significant resistance levels and reaching its highest levels in nearly seven years.

However, with the market showing signs of overheating, a short-term consolidation phase is expected.

XRP analysis

By Shayan

The weekly chart

Ripple has shown an impressive surge, rising more than 100% since last week, breaking through the $2 resistance level and reaching $2.5 for the first time since January 2018. This strong upward move indicates a dominant buying presence in the market.

The price action reflects extreme optimism, but the RSI has risen into overbought territory, suggesting the market is overheated. These conditions often precede a period of consolidation or corrective pullback, as buyers may need time to digest the gains before pushing the price back up.

In the medium term, the key support level to watch is the $2 threshold, which has now become a crucial support after being reclaimed as resistance during the recent rally. A pullback to this level would be healthy for the market, providing an opportunity for buyers to regroup ahead of a possible continuation of the uptrend.

The 4 hour chart

In the 4-hour period, the bullish structure is clear, with higher highs and higher lows. Ripple has successfully recovered several key resistance levels, including its previous ATH of $2, before climbing to the new $2.5 mark.

The asset recently broke above the upper trend line of an ascending channel, further emphasizing buyers’ dominance. However, the RSI in this shorter timeframe is showing a notable bearish divergence, indicating that a near-term correction is likely.

With its large number of leveraged positions, the overheated futures market increases the likelihood of a liquidation cascade if the price experiences a sharp decline. This suggests that while the medium-term outlook remains bullish, a short-term consolidation or pullback is expected, which may lead to higher volatility.

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