XRP price is on the verge of breaking out of a symmetrical triangle pattern, which is likely to lead to sustained gains.
Conclusion
- XRP price is close to confirming the upside breakout from the symmetrical triangle pattern on the daily chart.
- Stablecoin supply on the network has increased over the past week.
According to crypto.news, XRP (XRP) rose nearly 4% to an intraday high of $1.39 on March 10, Asian time.
The pullback came after the token fell nearly 8% to $1.34 from a weekly high of $1.46 as Bitcoin (BTC) corrected amid rising inflation fears from rising oil prices and escalating geopolitical tensions in the Middle East.
Now, as the price of XRP recovers, it is moving closer to a potential breakout from a multi-month symmetrical triangle formed on the daily chart.
For context, a symmetrical triangle pattern is formed when the price of an asset moves between two converging lines that connect a series of consecutive peaks and troughs. Typically, a breakout from the upper side of the pattern has been bullish for the asset, while a break from the lower trendline indicates a downtrend.
In the case of XRP, the breakout is coming from the upside and therefore offers a bullish outlook for the token in the coming sessions.
At press time, momentum indicators such as MACD and RSI are also showing that a strong recovery is underway. The MACD line is pointing upwards, while the RSI has formed a bullish divergence with XRP’s recent price action, indicating that selling pressure is cooling.
Currently, the 23.6% Fibonacci retracement level at $1.42 is the main resistance area that traders are paying close attention to.
A breakout from this level could potentially trigger a rally to $2.06, a target calculated by adding the height of the symmetrical triangle formed to the price point where the breakout is confirmed. The target is about 50% from the current price of $1.38.
The main catalyst that can support its gains is the increasingly stable supply on the XRPL network. Data from DeFiLama shows that the total stablecoin supply on the network has increased by 2.5% over the past 7 days to $426 million.
More supply means more liquidity and trading activity on the network, and investors often see such growth as a sign of increased demand for the underlying ecosystem.
However, some caution should be exercised as institutional demand for altcoins has weakened. Notably, US XRP spot ETFs posted $22 million in the past two weeks, snapping a four-week streak of inflows.
Disclosure: This article does not provide investment advice. The content and materials on this page are for educational purposes only.
