XRP price coils up, forecasts potential for a 30% breakout
|- XRP price is consolidating again, suggesting a potential for a repeat of the movement between February 3 and 8.
- Holders can expect a move to $1 to collect the untapped liquidity.
- A breakdown of the $0.746 support level will invalidate the bullish thesis for Ripple.
XRP price showed signs of a move lower on February 20, but bears failed to follow through and revealed an ongoing consolidation. On close inspection, Ripple price seems to be coiling up, a price action similar to what occurred between January 22 and February 3. Going forward, investors can expect the remittance token to see an explosive move.
XRP price awaits volatility
XRP price rallied 55% after coiling up between January 22 and February 3. This explosive move set up multiple swing highs at $0.915 and has since retraced to the $0.746 support level, kick-starting its second consolidation phase.
Therefore, investors need to watch the altcoin carefully as it is likely to result in another breakout. The critical levels to keep an eye on include - $0.855, $0.917 and $1.02 since they have uncollected buy-stop liquidity resting above them.
XRP/USDT 4-hour chart
Interestingly, the on-chain volume has shown a significant spike from 1.95 billion on February 16 to 4.35 billion on February 20, despite the recent consolidation. This 123% increase in on-chain volume suggests a healthy price action for XRP and further supports the possibility of moving higher.
XRP on-chain volume
Moreover, the 365-day Market Value to Realized Value (MVRV) at roughly -14% supports the possibility of a bullish move. This on-chain metric is used to determine the average profit/loss of investors that purchased LTC over the past year.
A negative value indicates that the holders that purchased XRP over the past year are underwater, making them less likely to sell if the price rises. Long-term holders also tend to accumulate assets around these areas, suggesting that a breakout from consolidation will likely result in significant gains.
XRP 365-day MVRV
While the bullish outlook seems plausible, a potential spike in selling pressure that knocks XRP price to produce a twelve-hour candlestick close below $0.746 will invalidate the bullish thesis. In such a case, the selling pressure could push the XRP price to fill the fair value gap and retest the $0.679 support level.
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