The recent XRP price rally faces the potential risk of exhaustion as a traditional bearish reversal pattern emerges.
The price of XRP jumped by nearly 4.25% to $0.461 on May 17th, its highest level in over a week after Ripple scored a small win in its legal battle versus the U.S. Securities and Exchange Commission (SEC).
Ripple scores a small win versus SEC
The XRP/USD pair hourly chart below shows exactly when XRP price decoupled from the rest of the crypto market.
XRP price noticeably jumped when former defense attorney James K. Filan tweeted a copy of a May 16 judgment concerning the legal battle between Ripple and the SEC.
What’s next for XRP price?
However, technicals are starting to lean bearish with XRP positioned for a potential price correction in May.
The bears will argue that the so-called Gravestone Doji on XRP’s March 17 candle was confirmed by a long upper wick and a minor distance between the token’s open and low points. Traditional analysts see a Gravestone Doji candle as a bearish reversal pattern.
In addition, XRP faces downside pressure from its 50-day exponential moving average (50-day EMA; the red wave) near $0.454 and a short-term descending trendline resistance. In the case of a pullback, XRP will likely see the next significant support at $0.42 in May, down 5.5% from current price levels.