The crypto market is experiencing a challenging period following DeepSeek’s launch of AI technology at significantly lower costs than GPT. This development has disrupted the stock market and subsequently impacted the crypto sector.
XRP price hasn’t been immune to these market conditions, currently trading below $3 for the first time since mid-January. This decline follows a period of relatively stable trading in the $3-3.10 range.
XRP Chart Analysis
Crypto analyst Ali Martinez shared insights about XRP’s price action through his latest technical analysis. The daily chart reveals an interesting development – a pronounced Bollinger Bands squeeze, which typically signals an impending significant price movement.
The current price action shows XRP consolidating between support at $3.1052 and resistance at $3.1299. While this might seem like a narrow range, the contracting Bollinger Bands suggest this period of low volatility may not last long.
The Bollinger Bands are squeezing on the $XRP daily chart, signaling that a significant price move could be on the horizon. pic.twitter.com/Sv7miRidTb
— Ali (@ali_charts) January 27, 2025
Bollinger Bands, developed by technical analyst John Bollinger in the 1980s, consist of three lines: a middle band (20-day simple moving average) with upper and lower bands representing standard deviations of the price. When these bands contract or “squeeze,” it often indicates that a significant price move is brewing.
In XRP’s case, the current Bollinger Band squeeze doesn’t provide clear directional bias. The price is hovering near the middle band, showing no consistent touches of either the upper or lower bands – a classic sign of indecision in the market. This technical setup suggests traders should remain cautious and wait for confirmation before making any directional bets.
The technical structure shows the XRP price trading near the middle Bollinger Band, with the bands themselves showing notable compression. This pattern often precedes a decisive move in either direction, though the direction itself isn’t predetermined by the squeeze alone.
Support remains firm around the $3.1052 level, with the psychologically important $3.00 mark serving as the next major support zone should current levels fail to hold. On the upside, a clear break above $3.1299 could signal renewed bullish momentum.
The consolidation phase, marked by decreasing volatility, suggests accumulation or distribution is taking place. However, traders should note that while Bollinger Band squeezes often precede significant moves, the direction of the breakout isn’t guaranteed and should be confirmed by additional technical indicators and market conditions.
Read also: When Will XRP Price Peak in 2025? Expert Prediction
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