The XRP price has pulled back in the past three consecutive days, mirroring the performance of Bitcoin and other altcoins. It retreated to a weekly low of $2.957 on Friday, down by nearly 20% from its highest level this year.
The ongoing Ripple token crash is likely part of the formation of the handle section of the cup-and-handle pattern, pointing to an eventual surge.
XRP Price is Forming a Cup-and-Handle Pattern
The daily timeframe chart shows that the XRP price made a strong bullish breakout this month, surging to a multi-year high of $3.66832. A closer look at this chart shows that the coin has been slowly forming the highly bullish cup-and-handle pattern.
As the name suggests, this pattern is made up of two parts: a cup with a rounded bottom and a handle. The handle can be in the form of a horizontal consolidation or a descending one.
XRP formed the handle section between January and last week. It is now forming the handle section, which is in the form of a pullback.
The price target in a C&H pattern is estimated by first calculating the cup’s depth in numerical or percentage terms. In this case, this pattern has a depth of about 52%. After this, one measures the same distance from the cup’s upper side.
Measuring 52% from its upper side brings its target to $5.2, implying a 65% surge from the current level. For this rally to happen, the coin will need to first flip the year-to-date high of $3.66 into a support level. It will then pass the crucial resistance level at $5 to confirm the bullish breakout.
XRP Price has other bullish technicals that will propel it higher in the coming weeks. For one, it remains above the 50-day and 100-day Exponential Moving Averages (EMA), which have provided it with substantial support.
XRP News: XXRP and UXRP ETF Inflows are Soaring
A potential catalyst for the XRP price is the ongoing signal of institutional demand in the United States. While the Securities and Exchange Commission (SEC) is yet to approve spot XRP ETFs, it has approved other unique ones.
For example, it approved a leveraged XRP ETF by Teucrium. This fund generates returns that are two times XRP’s daily performance. It is a high-risk and high-reward fund because if XRP rises by 2% in a day, it will jump by 4%. If XRP falls by 2%, the fund will drop by 4%.
Data shows that the XXRP ETF has become highly successful as its assets under management have jumped to $413 million, three months after launch.
The SEC also approved the ProShares Ultra XRP ETF (UXRP), which uses the same approach as the XXRP. UXRP started trading on July 14 and has already gained nearly $100 million in assets.
The strength of these funds means that Wall Street investors will be comfortable accumulating spot XRP ETFs once launched, potentially later this year.
Analysts at JPMorgan believe that XRP ETFs will add over $8 billion in inflows in the first year.
Another potential catalyst for the XRP price is that BlackRock’s success in crypto ETFs may lead it to file for a spot XRP ETF. For example, the iShares Bitcoin ETF (IBIT) has become its eighth-biggest fund and its most profitable.
Also Read: Top 5 Metaverse Crypto Coins to Watch This Week
Summary
XRP price has been in a strong rally in the past few months. It has surged by over 710% from its lowest level in July last year. Its strong technicals suggest that it may be on the cusp of a bullish breakout.
It has other catalysts in addition to the strong XRP ETF performance, including the ongoing Ripple USD (RLUSD) market share gains as its market cap jumps to over $530 million. Ripple Labs is also aiming to disrupt the SWIFT system that handles trillions of dollars in volume each year.
