XRP’s price saw a beautiful bottom reversal pattern triggered on 19 March. Alas, it failed to follow through. In fact, the most recent retracement now allows sidelined buyers an opportunity to get a piece of this action.
Ready for an explosive move
The altcoin’s price action from 10 February to 19 March set up an inverse head and shoulders formation. This pattern contains three valleys of uneven depths with the central dip usually digging deeper than ones on either side; this is referred to as the head. The shorter valleys present on either side the head are referred to as left and right shoulders.
Connecting the peaks of these valleys using trendlines results in the formation of a neckline that is used to identify the breakout.
The setup forecasts a 25% move to roughly $1, a level obtained by adding the distance between the neckline and the head’s lowest point to the breakout point of $0.80. Interestingly, XRP breached the neckline on 19 March.
After a brief rally, the crypto’s price paused and reversed the trend as BTC continued to free fall on the charts. This development allows bulls to solidify their position by bouncing off the neckline and confirming the uptrend. As a result, investors get another chance to get onboard the bull train. This is likely to propel the remittance token to $1 on the charts.
From a technical standpoint, $1.03 and 1.35 are crucial resistance barriers that the market makers will vie to retest. Hence, a highly bullish case could see the crypto’s bulls extend the run-up to $1.35, pushing the total gains from 23% to 70%.
Whaling on the rise
Supporting the bullish nature of the technical outlook for XRP is the supply distribution on-chain metric. This index shows that the three categories of whales holding between 100,000 to more than 10,000,000 XRP tokens have been accumulating since 20 July 2021.
Investors holding 10 million or more XRP have increased from 312 to 332, indicating that 20 new holders have joined the XRP blockchain. As expected, they are optimistic about the performance of the token in the near future.
Source: Santiment
Now, while things are looking up for XRP on the charts, a daily candlestick close below the right shoulder’s low at $0.740 will create a lower low and invalidate the bullish thesis. In such a situation, XRP’s price could crash to $0.702, a level where buyers can regroup and give the bull run another shot.
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