XRP Analysis: What It Takes to Hit Its Highest Level Since 2021

The price of Ripple (XRP) has seen a strong surge, increasing by 51.33% in the past seven days and an impressive 109.09% in the previous month. This strong upward momentum has pushed XRP into a bullish phase, with key indicators such as the EMA line supporting its upward trend.

However, there are signs that the upward momentum is weakening, such as a declining RSI and negative CMF, indicating the need for caution. Whether XRP continues to rise higher or faces a significant correction will depend on how the market reacts to these changes.

XRP's RSI is currently below the overbought zone

XRP's RSI has dropped to 60 after nearly reaching 90 on November 16th and has remained above 70 from November 15th to 17th. This decline indicates that Ripple has exited the overbought zone, where the strong buying pressure previously drove its price higher. This decrease suggests that the market is cooling down, with traders potentially taking profits after the strong rally.

The RSI measures the speed and magnitude of price changes, with values above 70 indicating overbought conditions and below 30 indicating oversold conditions. At the level of 60, XRP's RSI reflects a still-positive uptrend but suggests a more balanced sentiment compared to the previous rally. While the uptrend remains intact, the lower RSI may indicate a slower pace of increase, with the potential for consolidation as the market stabilizes. If buying pressure returns, XRP's price could continue to rise, but if the RSI declines further, it may signal a weakening of the uptrend.

XRP's CMF has turned negative after 14 consecutive positive days

The Chaikin Money Flow (CMF) indicator is currently at -0.12, after showing positive levels from November 5th to 19th. This is also the lowest level since October 31st. The shift into negative territory reflects an increase in selling pressure and the potential for capital outflows from the asset. The transition from the positive CMF values earlier this month signals a weakening of the uptrend as more market participants reduce their exposure to Ripple.

The CMF measures the volume and capital flow into or out of an asset, with positive values indicating capital inflows (price increase) and negative values indicating capital outflows (price decrease). XRP's CMF at -0.12 suggests that a bearish sentiment is starting to build, which could put pressure on its price despite the recent uptrend. If the CMF remains negative or declines further, it may signal prolonged selling pressure, challenging Ripple's ability to continue its upward trend.

XRP Price Prediction: Highest Price Since 2021?

XRP's EMA lines are currently displaying a bullish setup, with the shorter-term lines above the longer-term ones and the price trading above all of these lines. However, the narrowing gap between the price and some of these lines suggests the potential for a slowdown in the upward momentum. This may signal that the uptrend is weakening, making XRP's price vulnerable to changes in market sentiment.

If a downtrend emerges, as indicated by the weakening RSI and negative CMF, Ripple's price could face significant pressure and potentially drop to the support level of $0.49, representing a significant 56% correction. Conversely, if the uptrend regains strength, XRP could climb to test the $1.27 level and potentially surpass $1.30, marking the highest price since May 2021.

Join the BeInCrypto Community on Telegram to stay updated on the latest analyses, news, and insights about the financial markets in general and cryptocurrencies in particular.