In an analysis shared via X and YouTube, crypto analyst Matt “The Great Mattsby” Hughes highlighted what could be a historic move for the price of XRP, based on the Bollinger Bands indicator. Hughes points to an upcoming squeeze in XRP’s monthly Bollinger Bands, suggesting a potential rally similar to previous rallies that saw the cryptocurrency post massive gains.
Hughes explained via X: “XRP is having one of the tightest monthly Bollinger Band squeezes in its history and in all of crypto. The last time it squeezed like that, it was up 60,000%.” In a YouTube video, the crypto analyst went into more detail, explaining how the price of XRP has performed in the past when the Bollinger Bands were this tight.
XRP could skyrocket to $250
The first instance, according to Hughes, occurred between September 2016 and March 2017. During this period, the price of XRP consolidated for several months, which caused the Bollinger Bands to tighten dramatically. After this period of consolidation, the price of XRP rose sharply, achieving gains estimated by Hughes at around 60,000%.
The second time was from December 2020 to April 2021. In that case, XRP rose by about 1000%. “So it was much less than that period here and simply because it looks like it wasn’t as tight as it was here [the first time]“We can see it was a lot tighter the first time,” Hughes explained.
This is the third time. Interestingly, “it’s the tightest it’s ever been, even tighter than the first time, which suggests it should explode much higher than previous cycles,” he said.
Bollinger Bands are a technical analysis tool defined by a set of trend lines that are two standard deviations (positive and negative) away from the plain moving average (SMA) of a security’s price, but can be customized to suit the user’s preferences. A narrowing of these bands typically indicates low volatility with the potential for a huge bullish or bearish price move when the bands begin to widen again.
Hughes also examines the duration from the all-time high to the current price, noting that 2,373 days have elapsed. This long period of relative inactivity in the uptrend, combined with the extreme tension in the Bollinger Bands, forms the basis for his prediction of a significant move up ahead.
“It’s also the tightest it’s ever been, so that just tells me there’s going to be some kind of movement in the near future. I’m not sure when, but at some point we might see this looking more and more like it’s going to break out,” Hughes noted.
In addition to the technical perspective, he also discussed XRP’s price performance relative to its 20-month moving average. He notes that, similar to previous patterns, XRP spent a significant amount of time below this moving average before making significant rallies.
In both previous cases, the XRP breakout was preceded by a period below this moving average, followed by a breakout that began after testing the bottom of the Bollinger Band. Interestingly, XRP price has yet to test the bottom of the Bollinger Band. This is why Hughes speculates on a potential drop in price as a “final washout,” likely to the $0.30 area before a potential breakout.
Such a move would be consistent with previous cycles where a test of the lower Bollinger band led to forceful gains. “So there is a possibility that price will drop to test this. Maybe the last drop, maybe to $0.30, we don’t know, but if that’s the case, then it’s just another confluence of previous cycles where price could just break out,” he concluded.
By the way, if history repeated itself and XRP increased by 62,000%, the price would reach $250.
At the time of going to press, XRP was priced at $0.44574.
Featured image created with DALL E, chart from TradingView.com
