XRP price forms doji after bullish Ripple news, gains to be short-lived | XRP price technical analysis as it forms a doji candle

 Ripple XRP  

xrp 1.29%  

XRP has recently tested a significant resistance level at $2, reflecting an increase of approximately 20% from its lowest point this week. Nevertheless, it is still about 43% lower than its peak value this year.  

A key development regarding XRP was reported by Standard Chartered, which projected that the cryptocurrency could rise from $2 to $12 within the next four years. If this occurs, Ripple's market capitalization could escalate from its current $113 billion to over $600 billion, assuming the supply remains constant.  

Analysts have highlighted Ripple's expanding influence in the cross-border payments market, which is predominantly controlled by SWIFT. Ripple has marketed its solution as being more transparent, quicker, and more economical. While a standard SWIFT transaction incurs costs ranging from $20 to $50, Ripple's fees are under $1. Furthermore, Ripple transactions are executed instantly, in contrast to the longer processing times associated with SWIFT transfers.

In a recent interview, Brad Garlinghouse, the CEO of Ripple, remarked that the conclusion of the SEC lawsuit has resulted in an increase in partnerships with American companies. During the legal proceedings, many of these firms refrained from collaborating with Ripple, which subsequently led to a greater number of alliances with international businesses.

Additionally, Standard Chartered emphasized Ripple's advancements in the stablecoin market, noting that its RLUSD token has achieved a market capitalization of nearly $300 million. Just last week, Ripple successfully integrated RLUSD into its payment network.

Another significant development for Ripple was its decision to acquire Hidden Road in a deal valued at $1.25 billion. This acquisition is expected to enhance Ripple's institutional presence by leveraging Hidden Road's established client base.

XRP price technical analysis as it forms a doji candle

On the daily chart, XRP experienced a decline to $1.6145 on Monday, reaching its lowest point since November and coinciding with the 50% Fibonacci Retracement level. This drop occurred as the broader cryptocurrency market faced declines amid persistent trading uncertainties.

In the aftermath of this sell-off, XRP produced a significant doji candlestick, which is typically identified by its long upper and lower shadows and a small real body. This formation often indicates a potential reversal in trend, which may explain the token's recovery towards the critical $2 mark.

Nevertheless, XRP's price continues to encounter considerable risks moving forward. One concern is that this rebound could be a dead cat bounce or a bull trap, a scenario where a temporary price increase is followed by further declines.

Additionally, there is the threat of a break-and-retest pattern, where an asset falls below a crucial support level and subsequently retests it from below. In this context, XRP's retest of the $2 level, which serves as the neckline of a bearish head and shoulders pattern formed from November to this week, could signal further downward movement.

Finally, XRP has already exhibited a death cross, with its 50-day moving average crossing beneath the 200-day moving average. This bearish indicator suggests that the downtrend may continue, potentially driving the price below $1 in the near term before any eventual recovery occurs.