NOIDA (CoinChapter.com) — XRP, the cryptocurrency associated with Ripple Labs, is consolidating within the $2-$3 range after a parabolic rally in late 2024. The token’s recent price action has sparked optimism among traders, particularly as XRP’s Bollinger Bands on the daily chart are tightening, signaling a potential breakout.
Historically, such patterns have preceded significant price movements for XRP, and this setup is no exception. While traders remain cautious of a breakout in either direction, bullish historical precedents and improving market sentiment suggest a higher probability of an upward move.
Bollinger Band Squeeze: XRP’s Technical Outlook
XRP’s weekly chart highlights four major Bollinger Band squeezes since 2017, all of which preceded significant price rallies. In the past 10 years, XRP prices benefitted from the Bollinger Band squeeze at least four times.
The first time, in Dec. 2017, XRP rose by 1,346%, climbing from sub-$0.20 to its all-time high of $3.40.
XRP USD price action following Bollinger Band Squeezes. Source: TradingviewAnother squeeze in November 2020 resulted in a 247% rally, pushing XRP from $0.24 to $0.84. More recently, in June 2023, a similar pattern saw XRP rise by 103%. The most notable event occurred in November 2024, with XRP surging 486% to reach $2.80.
XRP price is currently experiencing another Bollinger Band squeeze, with the token consolidating between $2 and $3. The compression indicates a period of low volatility, often a precursor to significant price action. The move could attract buyers to the market, who anticipate a repeat of the token’s historical response to the event.
Based on historical patterns, a breakout could potentially result in another strong rally. However, traders must remain cautious, as squeezes can lead to breakouts in either direction. A move above $3 could allow XRP to target higher levels, while a breakdown below $2 would likely test lower supports.
Fundamental Drivers Supporting Bullish Outlook
Fundamental developments continue to bolster XRP’s outlook alongside its technical setup. Ripple’s long-standing legal battle with the SEC remains pivotal, especially as market sentiment shifts in anticipation of SEC Chairman Gary Gensler’s departure by mid-2025.
A potential leadership change could lead to a more crypto-friendly regulatory approach, fueling optimism about a favorable resolution to Ripple’s case and, by extension, XRP’s adoption.
Additionally, Ripple’s growing global presence in cross-border payments underscores its utility. The company’s partnerships with major financial institutions position XRP as a critical tool for liquidity in international transactions, strengthening its role in the financial ecosystem.
Furthermore, veteran trader Peter Brandt recently issued a rare apology to XRP holders, acknowledging his past criticism of the token. In a surprising turn, Brandt praised XRP as the “leader of the pack,” highlighting its resilience and recent price action.
Analysts have also speculated that Ripple should capitalize on the current momentum for spot Bitcoin and Ethereum ETFs by pursuing an XRP-based ETF, which could significantly enhance institutional adoption and credibility.
Broader macroeconomic conditions also play a key role in XRP’s trajectory. Declining inflation and Federal Reserve rate cut expectations have created a risk-on environment, increasing the crypto market. XRP, often buoyed by Bitcoin’s performance, is well-placed to benefit from these conditions.
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