XRP is moving in parallel with the general trend of the cryptocurrency market and has held steady above the $3 price level. According to recent technical analysis from the renowned cryptocurrency charting company Egrag Crypto, XRP's price volatility is about to enter a critical phase, pushing the price above double digits. XRP's current monthly Relative Strength Index (RSI) is showing what he calls the 'Third Cycle', forecasting an upcoming explosive phase.
Pump, Correction, and Dump
Egrag's framework is built on a repetitive pattern that always occurs in XRP's monthly RSI indicator. According to his analysis, the first phase of the cycle typically generates a strong RSI bullish surge, followed by the second phase, when corrections begin, and then the third phase continues as a breakout peak.
Both Cycle 1 and Cycle 2, which occurred during the XRP bull runs of 2017 and 2021, exhibit the same sequence, albeit with different intensities. The 2017 rally was much stronger than the 2021 rally, which was hampered by Ripple's lawsuit at that time. Therefore, the 2021 RSI pattern is much less pronounced, but still follows the same sequence.
The current setup, marked as Cycle 3 in the chart below, has completed the bullish and corrective phases. According to the analyst, the remaining phase is the third phase. This is the push to the explosive RSI peak, which could take XRP's price to new price levels.
Egrag Crypto predicts three feasible targets of 80, 87, and 97 for XRP's monthly RSI peak in the current cycle. These numbers are derived from the observed RSI trajectory in the last two cycles and predicted based on XRP's current RSI conditions.
What Does This Mean for XRP's Price?
If XRP's monthly RSI reaches levels like 80, 87, or even 97, it would be one of the strongest overbought signals in the history of this coin. The last time XRP's monthly RSI crossed above 90 was during the 2017 bull run, when XRP's price skyrocketed from below $0.1 to an all-time high of $3.40.
Technically, an RSI above 70 means the asset is trading at overbought levels, but in a bull market, this condition can persist for a long time as prices rise. For XRP, such a high RSI could coincide with new record highs, similar to what was seen in the 2017 bull run. In fact, this could push the price of XRP past the newly established record high of $3.65, up to $4, $5, and beyond, reaching double digits.
An RSI index for XRP above 90 could also be a warning that the price may have reached new highs in years. At the time of writing, XRP's monthly RSI index is at 73. XRP is trading at $3.12.
