Should you buy the correction in XRP as price pumps?

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Should you buy the correction in XRP as price pumps?

By Motiur Rahman - min read
  • XRP has jumped by double digits in the last one week

  • The gains have been fueled by positive expectations of the case with the SEC

  • The cryptocurrency is undergoing a correction after topping $0.55

In the past week, the price of Ripple’s XRP/USD has pumped by more than 36%. That happened after Ripple and SEC filed summary judgment motions for the long-standing case. In the filing, Ripple asked the judge to dismiss the case. Investors have been reading between the lines, expecting Ripple to win against the regulator.

Amid the positive expectations, whales have been accumulating XRP. Santiment data indicates that active addresses holding 1-10 million XRP have been on an uptrend since late 2020. The accumulation reflected expectations that Ripple would win the case against the SEC. Thus, filing the summary judgment reawakened hopes that the case could conclude soon. 

XRP slows after weekly gains take the token to $0.55

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The daily chart below shows XRP trading at $0.47. The token touched a high of $0.55 on September 23 amid a strong bullish surge. We consider XRP to be in a correction phase that will last a few days.

Source – TradingView

Technically, XRP is overbought. The latest correction suggests profit-taking activities after the price touched $0.55. Since speculations of the SEC case are far from over, XRP could still move higher. However, the current high price could force further corrections. We recommend buying on a retracement. The potential support is $0.45, $0.40, and $0.38. 

Summary

XRP faces correction as the token is currently overbought. Investors should wait to buy at a suitable support if the current correction continues. However, the price could still maintain the uptrend if positive speculations continue to emerge. We recommend buying lower for a higher return and lower risk.