- The price of XRP has returned to a crucial support barrier at $ 1.42.
- On-chain metrics like Network Profit and Loss and MVRV suggest a reset due to a recent crash.
- A rebound in the demand zone from $ 1.33 to $ 1.40 could trigger a 40% bullish rally.
The XRP price shows the promise of a bullish rally that could create new annual highs. The move comes after Ripple tested a critical support barrier.
XRP price seems to rebound
The price of XRP fell nearly 10% during a previous 4-hour candlestick to test the neckline of the head and shoulders pattern at $ 1.42.
This setup contains three swing lows, with the central trough called the head, while the other two of comparable depth are known as shoulders. The swinging highs of these peaks can be connected using trend lines to form a horizontal resistance at $ 1.42, known as the neckline.
A decisive close above $ 1.42 predicts a rise of 35%, which is the distance from the neckline to the bottom of the head. Adding this measurement to the horizontal resistance gives a goal of $ 1.98.
After breaking this pattern on April 30, the money transfer token jumped 19% but was rejected around $ 1.65, resulting in a 15% crash at $ 1.42, where the XRP price is currently trading.
If buyers join in, the price of XRP could skyrocket 40% to $ 1.98 after breaking through the supply barrier at $ 1.65.
4 hour XRP / USDT chart
The reset of Ripple’s Network Profit and Loss (NPL) indicator, which calculates the overall return of all daily trades, supports this recovery. Therefore, a peak in this metric coincides with the possibility of a local peak.
This fundamental index surged on May 1, representing the initial rejection at $ 1.65. Subsequently, May 3 also saw a sudden surge in the NPL, suggesting that many addresses were in profit, opening up the possibility for investors to reserve profit.
At the time of writing, this metric has been reset, paving the way for more times.
XRP Network Profit and Loss Graph
The same happened with Santiment’s 30-day MVRV model, which tracks network profit / loss for addresses that bought XRP in the past month.
This metric also resets after hitting a local high of 0.238%, indicating that a bullish recovery may be imminent.
XRP MVRV 30 Day Chart
Regardless of the trend, if the bearish momentum moves to $ 1.31, the bullish scenario around XRP price will face invalidation. In this case, Ripple could slide 11% to test subsequent support at $ 1.16.