XRP price rebounds after worst month since June 2021 — major recovery ahead?

XRP opened May with a decent price rebound after falling 28% in April, its worst monthly performance since June 2021. Furthermore, the XRP/USD pair shows prospects of continuing its recovery trend in the coming weeks.

Support confluence raises XRP bullish prospects

XRP’s price rose by nearly 6.25% in the first two days of May, going as high as $0.63 (data from Binance). The buying sentiment surged around $0.58, a level that acted as strong support in January 2022 and enabled XRP to rise by more than 50% thereafter.

Interestingly, the $0.58-support coincides with XRP’s 200-week exponential moving average (200-week EMA; the blue wave in the chart below).

It also serves as the lower trendline of a broader descending triangle pattern, a bearish indicator targeting $0.18 in the coming months.

But with XRP’s price bouncing from a confluence of support levels, its likelihood of retesting the triangle’s upper trendline is high. That would have the token test levels above $0.75 — up nearly 30% from today’s price — as their next resistance target in Q2/2022.

Buy the rumor

XRP has emerged as a speculative vehicle for traders looking to benefit from the ongoing SEC vs. Ripple case.

In December 2020, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple for conducting illegal securities sales via XRP. Nonetheless, recent hearings indicate that the case has been going relatively well for Ripple.

https://twitter.com/Kevin_Cage_/status/1515385084412583943?ref_src=twsrc%5Etfw

The SEC vs. Ripple case has dampened buying sentiment in the XRP market, given it is the only veteran token in the top-ten that has been unable to beat its 2017-2018 bull market highs. But analysts believe that Ripple’s win would drastically improve XRP’s upside prospects.

Related: Ripple CEO: SEC case is going ‘much better than I hoped’

“XRP investors could benefit immensely if Ripple is victorious in the war,” says Practical Crypto Capital, analyst at SeekingAlpha, albeit adding:

“Holders must watch for the news and be prepared; based on the examples from the past year, we can probably expect the gains to rapidly peak and then decline.”

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