XRP price near surged to its 3-calendar month high post-obit a potent uptrend continuation on Aug. fourteen. Still, its wild weekly run-up triggered overvaluation risks, thus raising possibilities of an imminent toll pullback.

In detail, the XRP/USD exchange popped eleven.78% college to reach $ane.20 for the first time since May 22. The pair's gains appeared equally a part of a prevailing bullish trend that started July twenty when it was trading for as depression as $0.154 — a 134% upside retracement on the whole.

On a week-to-appointment timeframe, the XRP/USD rates were upwardly circa 54%.

XRP overbought

The latest bullish moves in the XRP market place prompted two classic indicators to forecast imminent toll corrections.

The offset indicator is the relative force indicator (RSI). It represents a magnitude of price changes to evaluate overbought or oversold conditions. In detail, the RSI oscillates between zero and 100, with a reading in a higher place 70 showing overbought and a reading beneath 30 showing oversold conditions.

If the asset'south RSI stays above seventy, it typically prompts traders to sell information technology at college prices to secure maximum available profits. Similarly, if the RSI dips below 30, information technology creates opportunities for traders to purchase the asset at a seemingly lower rate.

The XRP/USD's daily RSI triggered warnings of excessive valuations after its readings crossed above 70. Equally a result, the pair experienced a pocket-size sell-off nearly its local loftier of $1.20, dipping to $1.14 at the press fourth dimension.

XRP/USD daily price chart featuring RSI indicator. Source: TradingView.com

The 2nd indicator is Bollinger Bands.

They are envelopes plotted at a standard divergence level above and below the cost's elementary moving average. They tend to measure out an nugget'southward volatility based on the altitude between the upper and lower band. When the price moves out of the band, it tends to immediately move back within the band surface area.

XRP/USD daily cost chart featuring Bollinger Bands indicator. Source: TradingView.com

XRP/USD's latest volatile move upside pushed its rates outside the upper band resistance, signaling overvaluation. As a result, its probability of correcting back below the upper band level appears loftier, which may later follow up with an extended move towards the 20-day simple moving average (orange moving ridge) near $0.80.

Boosted gains anticipated

Despite overvaluation risks, other traders believe XRP is poised to continue its bull run. For instance, independent market analyst DonAlt thinks XRP could sprint towards its all-time high, merely because information technology has broken in a higher place a so-called resistance area, every bit shown in the chart below.

XRP/USD daily chart BitFinex. Source: TradingView.com, DonAlt

"Close above red ($i) this week and I don't see a reason for XRP to not brand new ATHs," the analyst said, adding:

"But, at the aforementioned time, if information technology ATHS the finish of the run is near."

Kevin Muzzle, another popular nautical chart analyst, added a dose of fundamentals to the bullish outlook, noting that XRP at its all-fourth dimension high would mean that Ripple has reached a settlement with the U.s.a. Securities and Substitution Committee (SEC).

The U.Southward. securities regulator filed a lawsuit confronting Ripple in December 2022, alleging that the latter engaged in this illegal securities offer via the sale of XRP tokens in 2022 and afterward. Ripple denied the allegations.

Related: SEC wants 'terabytes' of Slack communications from Ripple

On Aug. 16, Ripple volition reply to the motion filed by the SEC for the discovery of "terabytes" of Slack communication data. The documents, if filed, may shed more light on whether or not Ripple sold XRP to its investors as securities.

The views and opinions expressed here are solely those of the writer and practice non necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your ain research when making a decision.