XRP nears key breakout but lackluster volumes may spoil its 30% rally setup.
XRP (XRP) rose 2.1% to $0.52 on April 11, extending its daily gains from $0.50 alongside a broader cryptocurrency market rally as traders pinned hopes on easing inflation data into April 12.
XRP's upside move brought it closer to breaking out of its prevailing bull pennant range with a price target of $0.65.
However, lackluster volumes accompanying XRP's gains hinted at a potential price correction in the future. That could mean a short-term pullback toward the pennant's lower trendline near $0.51 in April or a broader correction altogether invalidating the bullish continuation setup.
The extended selloff scenario is best visible on the weekly chart below, wherein a key resistance-turned-support line has limited XRP's upside prospects.
If the fractal plays out again, XRP price will risk falling toward its multi-month ascending trendline support near $0.40 by May, down about 25% from current price levels.
XRP price has soared by nearly 55% in 2023 primarily due to anticipations that Ripple will win the lawsuit filed against it by the U.S. Securities and Exchange Commission (SEC). That includes its 43% rise in March amid speculations that the ruling will come out by the month's end.
Related: Ripple, Montenegro sign deal on project for unspecified national digital currency
But it didn't. Simultaneously, the Google search score for the keyword "SEC vs. Ripple" declined from its March peak of 100 — a perfect score — to 56 in the week ending April 8.
In addition, "XRP" social volumes dropped from their March highs, according to data tracked by Santiment.
Lastly, XRP remains in lockstep with Bitcoin (BTC) on a daily timeframe. However, as Cointelegraph noted, BTC risks a correction to $25,000 in the near term due to rate hike risks, putting XRP and other altcoins in danger of losses as well.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.