XRP price continues to consolidate between two key converging trend lines. Accordingly, it is preparing for a major breakout leading to a bullish or bearish breakout. However, on-chain indicators suggest that this move will benefit the bulls.
XRP bulls await volatility
XRP price action since December 2021 has established 2 lower highs and 2 higher lows. Drawing trend lines along these pivot points reveals a symmetrical triangle pattern. While not presenting a possibility of a breakout, it forecasts a 46% move obtained by measuring the distance between the initial swing high and the swing low.
Adding this distance to the breakout point gives the theoretical goal of the setup. A bullish breakout would take XRP to $1.24, while a bearish breakout could take the remittance token to $0.362.
It is estimated that the price will continue to consolidate for 1 or 2 more weeks before breaking out. However, judging by the market’s recent uptrend, XRP is likely to trend north if it moves out of the symmetrical triangle.
XRP/USDT 1-Day Price Chart | Source: TradingView
The supply distribution chart shows that XRP whales are busy collecting transfer tokens. Whales with 10 million XRP or more jumped from 317 to 337 between February 6th and February 21st. This 6.3% increase shows that they are interested in investing at the current price level, which is the bullish breakout from the symmetric triangle supported.
XRP supply distribution chart | Source: Trade View
While the bullish outlook is quite optimistic, market participants should also keep an eye on the bearish scenario for risk management. Triangles usually meet a fakeout before the price reverses in the actual direction. Such a possibility is possible for XRP mainly because liquidity is currently below comparable lows of $0.509.
Therefore, a short-term wick below $0.509 is needed, allowing market makers to gather liquidity. This move is likely to take place as buyers accumulate XRP at a lower price, sparking a bull run.
Conversely, a bearish scenario is if XRP creates a daily candle close below $0.509. This move will form a lower low and invalidate the remittance token’s bullish thesis. Such developments are signaling the possibility of a continuation of the downtrend and propelling the price towards the $0.362 predicted levels.
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According to AMBCrypto