A traditional bullish continuation setup could see the price of XRP rise by more than 20% in the upcoming weeks.
After a significant increase, the price consolidates inside a parallel channel, forming the so-called bull flag pattern. It ends when the price climbs to the height of the prior upswing and breaks over the upper trendline with strong volumes.
Even with lower volume, XRP was trading above the upper trendline of its bull flag as of November 26. Technically speaking, that suggests that traders are less certain about XRP’s bullish continuance.
The length of the traders’ indecision may have caused the price of XRP to test the upper trendline of the flag as support. By November, that implies a drop around $0.59, which is in accordance with the 50-day exponential moving average (50-day EMA; the red wave) and a historical support level.
This level coincides with XRP’s weekly timeframe chart’s downward target.
In December, assuming the bull flag scenario persists and is characterised by a high-volume rebound from the upper trendline, XRP might rise towards $0.75, up over 20% from current price levels.
On the other hand, a break below the upper trendline of the flag would stall the bullish continuation setup and force the next downward target to be the lower trendline, which is located near $0.54 and coincides with the 200-day EMA (the blue wave).
The robust accumulation among XRP’s wealthiest addresses appears to be tilting the company’s on-chain data in favour of bulls.
Notably, the supply of cryptocurrency has increased among addresses with a balance between 100,000 and 10 million tokens throughout the correction period. Over the course of the last week, these so-called “whales” have acquired $6.82 million worth of XRP tokens.
Put otherwise, the fact that these whales are purchasing XRP at what are probably local lows suggests that they are confident in a price increase in December, which is consistent with the bull flag scenario that was previously discussed.
The main bullish driver behind XRP’s roughly 85% price increase so far in 2023 has been Ripple’s partial victory over the US Securities and Exchange Commission (SEC). Whether Ripple’s XRP sales to institutional investors violated US securities laws is still up for debate in court.
On April 23, 2024, the trial between Ripple and the SEC is expected to recommence. Legal experts believe there is a high chance of a settlement. According to crypto lawyer John Deaton, Ripple will win 99.99% of settlements under $20 million.