Even though several factors, including the recent announcement of a pro-crypto SEC chairman Paul Atkins, are somewhat in favor of the coin, it seems to have taken a different direction, plunging more than 10% in the last 24 hours to trade at $2.35 at the time of writing.
While investors are hopeful for a return to its rally-ways, several technical indicators have pointed to a likely situation of XRP experiencing a significant correction that could drop its price even further.
XRP's Technical Metrics Indicates Potential Crash
On the technical side of things, XRP's relative strength index (RSI) now reflects 91, signaling an overbought position. This point is extremely rare and indicates an overheated condition in the market. Notably, the RSI peaked at 95 during the rally to $2.9 which is a visible warning of an imminent correction.
Citing historical data, such heated RSI often comes before a period of significant retracement. Notably, between November and December 2020, XRP crashed nearly 80% to $0.17 after its RSI climbed to a similar point as now. Importantly, XRP has now established critical support between $1.8 and $2.
Despite these warnings, the XRP community is still confident in the future outlook of the project, and they believe it still has the strength to reignite the rally and forge on to its all-time high of $3.4.
Moreover, Ripple is getting ready to launch its highly anticipated RLUSD stablecoin which is expected to improve the use case of XRP and draw more demand to the project.
