Analyst Says Buy XRP Before $14, Citing Global Liquidity Rise and Bollinger Bands Squeeze

Crypto analyst Steph, recognized as “StephIsCrypto,” has discussed why XRP may be on the cusp of a major price surge, citing a rise in global liquidity.

In his recent analysis, he pointed out XRP’s historical relationship with global liquidity and structural patterns such as a Bollinger Bands squeeze and descending channel. According to Steph, these factors are setting up the perfect conditions for an XRP price breakout.

XRP Historic Ties to Global Liquidity

Steph highlighted how increases in liquidity have led to XRP’s price rallies. He noted that global liquidity—the availability of cash flow across markets—played a major role in XRP’s explosive growth during past cycles.

This pattern occurred in 2017 to 2018, a time when XRP reached an all-time high of $3.30 on the back of a surge in global liquidity. The trend also played out from 2020 to 2021, with XRP reaching a high of $1.96 by April 2021.

Currently, Steph suggests that a similar setup is forming. With global liquidity on an upward trajectory due to potential policy shifts from central banks, he anticipates another favorable environment for risk-on assets like XRP. 

He noted that actions by institutions such as the Federal Reserve, which may inject more money into the economy, could weaken fiat currencies and create an influx of capital. For this reason, Steph sees XRP as an ideal investment in light of the upcoming liquidity surge.

Weighted Global Liquidity Index

Further, Steph spotlighted the Weighted Global Liquidity Index (WGLI), which monitors global money supply by tracking central bank balance sheets and major U.S. accounts. 

According to him, this index is an indicator of potential price movements for risk-on assets like XRP. As WGLI trends upward, assets like XRP often experience value increases. Steph noted that since 2016, every major XRP rally has occurred after a rise in this index.

At present, Steph pointed out a divergence between WGLI and XRP’s price action. Although liquidity is rising, XRP has remained relatively stable, moving sideways in recent months. However, he sees this divergence as a bullish signal.

XRP Descending Channel and Bollinger Bands Squeeze

Besides macroeconomic factors, Steph also highlighted prominent indicators. He highlighted a descending channel that XRP has been trading within since 2021. This channel features declining trading volumes and multiple resistance tests. 

Steph believes each test of the resistance weakens it, bringing XRP closer to a breakout point. He argues that as long as XRP holds above the crucial $0.50 level on weekly closes, the overall uptrend remains intact. At the reporting time, XRP trades for $0.5039, up 0.19% this morning.

The market analyst also called attention to the compression in XRP’s Bollinger Bands. Interestingly, The Crypto Basic recently identified this squeeze in an analysis last week, noting that the compression has held for over a year.

When Bollinger Bands tighten, it signals an impending price movement. For instance, in 2017, XRP’s Bollinger Bands also compressed just before a major rally. Steph sees the current squeeze as a sign that XRP is nearing another substantial breakout. 

He expects a rally to $14, which would mark a 2,678% increase from the current price. Market analyst JD also identified the $14 level as a minimal target for XRP in a March 2024 analysis. At $14, XRP’s FDV would stand at $1.4 billion.