XRP’s price is gearing up for a potential rally of more than 20% in the upcoming weeks, thanks to a classic bullish continuation pattern known as the bull flag.
This pattern typically emerges after a strong uptrend and is characterized by a period of consolidation within a parallel channel.
The breakout from the bull flag occurs when the price convincingly breaches the upper trendline and surges by a magnitude similar to the previous uptrend.
As of November 26, XRP was trading above the upper trendline of its bull flag, although with weaker trading volumes.
This suggests that there might be some uncertainty among traders regarding the sustainability of XRP’s bullish trend.
Consequently, there is a possibility that XRP’s price could test the flag’s upper trendline as a support, potentially leading to a decline towards the $0.59 level.
This level aligns with historical support and the 50-day exponential moving average (50-day EMA).
Additionally, this $0.59 level coincides with XRP’s downside target on the weekly timeframe chart.
However, if the bull flag scenario remains intact and is accompanied by a substantial increase in trading volume from the upper trendline, XRP could see a resurgence, climbing to around $0.75 in December, representing a gain of more than 20% from its current levels.
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Conversely, a break below the bull flag’s upper trendline could postpone the bullish continuation setup, potentially bringing the lower trendline near $0.54 into play.
This level corresponds to the 200-day EMA (the blue wave) and would serve as the next downside target.
On-chain data for XRP indicates a bullish sentiment, primarily due to significant accumulation by its wealthiest addresses.
Whales, defined as addresses holding between 100,000 and 10 million XRP tokens, have acquired approximately $6.82 million worth of XRP tokens over the past week.
This accumulation by influential players suggests a strong belief in an impending price increase in December, aligning with the anticipated bull flag pattern.
However, it’s essential to consider that the outcome of the ongoing legal battle between Ripple and the United States Securities and Exchange Commission (SEC) could significantly impact XRP’s future price movements.
While XRP has surged nearly 85% in 2023, driven by Ripple’s partial win against the SEC, the court is yet to rule on whether Ripple’s XRP sales to institutional investors violated U.S. securities laws.
The trial is set to resume on April 23, 2024, with many legal experts anticipating a potential settlement.
A settlement below $20 million, according to crypto attorney John Deaton, would be considered a significant victory for Ripple, with a high likelihood of such an outcome.
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