XRP price eyes 30% upside after key resistance area breaks
2023.04.07 11:14
XRP (XRP) has risen by an impressive 60% in the first quarter of 2023, helped by rising speculation over Ripple’s legal win versus the U.S. Securities and Exchange Commission (SEC) and broader bullish sentiment in the cryptocurrency market.
The XRP/USD pair now eyes more gains in the second quarter, primarily due to a classic bullish continuation pattern.
XRP price paints bull pennant
Late March, XRP broke above its multi-month ascending trendline resistance, averting a potential 35% correction. The rebound reached $0.58 on March 29, its highest level since May 2022.
Now, XRP has been consolidating sideways in what appears to be a bull pennant. This bullish continuation pattern forms when the price consolidates inside a symmetrical triangle after undergoing a strong rally.
A bull pennant resolves after the price breaks above its upper trendline while accompanying a rise in trading volumes. The pattern’s breakout target is obtained by adding the height of the previous uptrend (flagpole) to the breakout point.
In other words, a bullish target of $0.65 in Q2 for XRP price, up around 30% from current levels.
XRP/USD daily price chart. Source: TradingView
Conversely, a decisive close below the pennant’s lower trendline risks invalidating the bullish setup and increases XRP’s probability of testing its 50-day exponential moving average (50-day EMA; the red wave) near $0.44 as its next downside target.
Whales scoop up XRP as dollar weakens
The YTD gains in XRP price coincide with a rise in whale accumulation, according to data tracked by Santiment.
Related: Why is XRP price up today?
For instance, the supply of XRP held by most whale address cohorts — be it 1,000-10,000 XRP, or 100 million-1 billion XRP — has increased alongside its 40% gains in 2023 despite reports of some whales dumping XRP worth around $35 million.
XRP supply distribution among whales. Source: Santiment
Meanwhile, a weakening U.S. dollar has boosted risk-on assets across the board, including Bitcoin (BTC), whose correlation with XRP has largely remained in lockstep on a daily timeframe this year.
XRP/USD and BTC/USD daily correlation coefficient. Source: TradingView
Overall, the bullish scenario for XRP remains dependent on a Ripple win against the SEC in the near term, while a “sell the news” scenario should also not be ruled out.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
