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A recent analysis of XRP price movement using Linear Regression suggests the altcoin has some impressive price growth potential.
This analysis came from market commentator EGRAG, who recently applied this tool to evaluate XRP’s trendline and future price forecasts.
EGRAG projected a possible price range that stretches from $5 up to $27 by analyzing standard deviation bands. The results suggest that XRP’s price could experience moderate to extreme upward shifts, depending on how it reacts to market conditions.
XRP Current Position
EGRAG confirmed that the XRP price is currently trading near the lower end of the -1 standard deviation band. This indicates that the altcoin is oversold and could be primed for a price correction.
Linear regression uses standard deviation bands to determine when an asset is either overbought or oversold. When prices hover near the lower end of these bands, as XRP does now, it signals an imminent bounce back toward the mean or average price.
For XRP, the analyst has identified that the mean reversion target – where the price is likely to gravitate back to – is around $1.85 in the short term.
This value is the midpoint of the regression channel, and returning to it would represent a significant price increase from XRP’s current level. This marks the first potential price shift investors could expect as XRP corrects from its oversold position.
XRP Price Targets Based on Standard Deviation
The upper band of the regression channel, located at +1 standard deviation, is where XRP would enter an overbought region.
Based on EGRAG’s projections, this level is set at $5.76 in the near term. As XRP approaches this price, it could face selling pressure as it nears the top of its range.
However, should XRP follow the same trajectory it did during its previous major bull run in 2017, breaking above this upper band would set the stage for much higher price levels.
For longer-term projections, the analyst suggests that the mean reversion target could reach $2.4 in the coming months and $3 within a year. Meanwhile, the upper standard deviation band rises to $7.31 in several months and $9.3 within the year.
XRP Price Overshooting the Standard Deviation Bands
EGRAG also identified a potential for XRP price to overshoot the +1 standard deviation level. This happened during the 2017 bull run, and the same could occur again. Should it happen, the analyst provides two projection models based on historical data from previous XRP price cycles.
The first model assumes a 180% price overshoot beyond the upper standard deviation band. Using this calculation, the price could hit $16 if such an event occurred. The 6-month target under this scenario would be $21, while the 1-year projection could reach an impressive $27.
Meanwhile, the second model takes a more conservative approach, predicting a 110% overshoot. For this, the XRP price could surge to $12 immediately, reach $26 in six months, and fall to $20 within a year.