In January XRP surged nearly 50%, briefly topping $18 on January 3,39, its highest level in nearly seven years. However, the altcoin’s meteoric rally could hit a snag, with technical indicators pointing to a potential 25% correction down.
The key prerequisite was the emergence of a bearish divergence between the price XRP and its daily relative strength index (RSI). While the token price was rising to multi-year highs, the RSI oscillator was moving down, forming a downward pattern.
This divergence indicates that the upward momentum supporting the rise XRP , is weakening, increasing the likelihood of a reversal in the coming days or weeks.
Price chart XRP
In addition, the price XRP remains well above the 50-day exponential moving average (50-day EMA; red wave), a key technical support level.
As of January 18, the 50-day EMA is at $2,28, which is about 25% below the current price. XRP . Historically, rapid cryptocurrency price increases tend to return to their EMA levels as traders take profits and the market stabilizes. This has happened before with XRP in 2018 year.
