Key Takeaways
- XRP has been consolidating for nearly three months.
- Prices have gotten squeezed between the $0.80-$0.74 range.
- Such market behavior suggests that a spike in volatility is underway.
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Ripple (XRP) appears to be gaining momentum for a breakout as it approaches the apex of a symmetrical triangle on its daily chart. Still, the direction of its trend will be determined after a break of support or resistance.
Ripple Looks Primed for Volatility
Ripple appears to be gearing up for a significant price movement after consolidating for nearly three months.
The cryptocurrency market has kicked off Monday’s trading session on a positive note. Bitcoin gained more than 1,000 points in market value while Ethereum surged by 3.67%. Despite the early signs of optimism, most digital assets remain stagnant without clearly indicating where they are heading next.
For instance, XRP’s price action continues stuck within a symmetrical triangle that has been forming on its daily chart since late December 2021. A descending trendline developed along with the swing highs while an ascending trendline formed along with the swing lows. This consolidation pattern estimates a daily candlestick close outside of the $0.80-$0.74 price range will determine the direction of the trend.
Given the ambiguous outlook that Ripple presents, it is reasonable to wait for a decisive break of support or resistance before entering any trade. Breaching any of these hurdles could result in a 39.50% price movement to either $1.12 if bulls take over, or $0.45 if bears take the upper hand. This target is determined by measuring the distance between the two highest points of a triangle and adding it to the breakout point.
It is worth noting that XRP remains at risk of securities classification. Even though Ripple has assembled an all-star team of securities lawyers, with Andrew Ceresney, former director of the SEC’s Division of Enforcement being one of them, a hypothetical “XRP = security” court ruling will not go unnoticed. The ripple effect of such a decision could lead to a wipeout of many adamant investors.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
