Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
XRP witnessed a breakout from its descending wedge pattern, but its price is yet to topple the swing high of $1.30. A retracement over the next 24 hours would give rise to a symmetrical triangle, one from which $1.60 can be achieved.
Moreover, the sentiment is expected to be favorable after Ripple’s latest win in the courtroom battle against the SEC. At the time of writing, XRP was trading at $1.27 and held the sixth position on CoinMarketCap.
XRP Daily Chart
Although XRP broke above the upper trendline of a bullish pattern, low volumes aired a degree of uncertainty. If an asset breaks away from a pattern of low volumes, the chances of a throwback are considerably high. Similarly for XRP, a southbound move and a close below the 20-SMA (red) would allow sellers to extend near-term losses to $1.12. This would give rise to a symmetrical triangle formation. A successful breakout would then put $1.60 in the crosshairs.
To negate this setup, XRP would need to close above $1.30. This would function as a continuation of an earlier breakout, with targets set slightly above $1.40. Conversely, a deep retracement and close below $1.05 would severely dislodge XRP’s bullish structure.
After stabilizing from overbought conditions just last week, the RSI prepared for another run towards the upper territory. This was accompanied by some momentum built up on the Awesome Oscillator.
The Directional Movement Index’s +DI traded above the -DI as XRP’s bullish trend seemed to be under no immediate danger of a reversal. If the RSI and AO continue to tick north, the chances of a throwback towards $1.12 would be minimal.
XRP can set its immediate sights on $1.40 on the back of a descending wedge pattern. However, a throwback and newer low at $1.120 would allow XRP to take shape within a symmetrical triangle – A pattern with bigger breakout potential.
If the market plays out this way, a 40% hike towards $1.60 can be anticipated over the course of a few weeks.