XRP seems to be built differently. With Bitcoin and other crypto charts showing positive signs of upcoming breakouts, XRP has triggered a major break with strong follow through momentum. This comes as XRP did not move along with Bitcoin and most cryptos during the Silvergate and subsequent Silicon Valley Bank issues. While cryptos moved down on the news, XRP remained ranging as you see in the chart below.
Before we look at the chart, why don’t we talk about the fundamentals that crypto writers are attributing to this XRP move.
As with the case most of the time, writers are stating an interest has been built around XRP as an intriguing binary bet on the outcome of this project’s ongoing legal battle with the Securities and Exchange Commission (SEC). The SEC sued XRP’s parent company Ripple in late 2020, alleging those behind this token’s initial coin offering essentially provided a $1.3 billion unregulated securities offering.
Social media videos and commentary have apparently convinced the market that a positive outcome is coming. The idea is that XRP’s downside may be limited, given the probability that, in the case of an SEC victory, Ripple will appeal the decision, leaving this token status quo for the time being. However, if Ripple is able to get the “security” moniker removed, the potential upside for XRP could be significant.
The summary judgement could be handed down in the next few weeks, potentially even at the end of this week. Expect there to be more volatility around XRP. The interest is certainly there with the notional open interest in XRP has increased by nearly 90% to $843 million which is the highest since December 2021.
Traders and investors are hoping this judgement could spark a new ‘alt season’, however, I think the technicals speak for themselves. As readers of my work know, we tend to cover the news before it happens with technical breaks. Charts and price action can tell you what is coming down the pipeline.
Let’s start on the daily chart.
XRP has rallied 57% since March 22, reaching a ten-month high of $0.584.
I want to point your eyes to the flag pattern I have drawn. This was a technical pattern we have been watching for sometime. We were expecting a breakout to be our buy trigger confirmation. However, XRP just did not breakout even with other cryptos moving pre and post banking crisis headlines.
We got the breakout finally on March 21st 2023. That was the trigger to go long with stops below the breakout of the flag. With XRP in a new uptrend with the breakout, we expect multiple higher low swings in this move.
The first higher low swing was confirmed with XRP pulling back on the breakout, and then breaking above recent highs taking us to the $0.58 zone.
Now let’s zoom out a bit:
When you zoom out to the weekly chart, you will see why XRP is seeing some selling around the $0.55 zone. This is a MAJOR resistance zone for XRP. We say zone, because support and resistance are not just one number. This resistance zone seems to include $0.60.
There could be some pullback on XRP as we see more profits being taken at resistance, and potentially, some sellers jumping in as well. However, I do like the weekly chart set up as it is showing a double bottom pattern. I would expect a few weeks of red candles, keeping us above our flag breakout, and then a weekly candle breakout above $0.60:
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