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This Bullish XRP Pattern Previously Led to 55% Price Increase – Can History Repeat?

Published July 3, 2024 8:21 AM
Valdrin Tahiri
Published July 3, 2024 8:21 AM

Key Takeaways

  • The XRP price created a triple bottom pattern that previously led to a significant increase.
  • XRP has traded close to the support trend line of a long-term parallel channel pattern.
  • Will history repeat and lead to a similar movement, or will the XRP price break down instead?

XRP has been one of the worst performing large market capitalization cryptocurrencies since the start of the year, falling by slightly more than 20%. Despite the decline, XRP trades inside the confines of a 319-day pattern.

More interestingly, the XRP  price has created a bullish pattern that led to a 55% price increase in August 2023. Despite its underperformance, this signal gives hope to XRP bulls that a similar increase will follow this time around.

XRP Creates Bullish Pattern Inside Long-Term Support

The XRP price has trades inside a parallel channel pattern since August 2023. Both the support and resistance trend lines of this pattern have been validated numerous times. Additionally, since the channel is neither ascending nor descending, it is unclear which way it will break.

On April 13, XRP broke down from the channel, falling to a low of $0.42 (green icon). However, it immediately bounced, creating a long lower wick and reclaiming the channel’s support trend line. Then, it returned to validate the channel twice more in June and July. During this entire period, the daily RSI and MACD have generated bullish divergences, signs often leading to a bullish trend reversal.

XRP Bullish Pattern
XRP/USDT Daily Chart | Credit: Valdrin Tahiri/TradingView

A nearly identical movement transpired between August and October 2023. At the time, the XRP price created a similar triple bottom pattern that led to a 55% increase, taking XRP to the channel’s resistance trend line.

If XRP begins a similar increase, the channel’s resistance trend line will be at $0.725, a 55% increase from the current price. The trend line has not been reached since March.

XRP Price Prediction: Will Bullish Pattern Materialize?

The most likely wave count supports the beginning of a XRP upward movement toward the channel’s resistance. This is true in both the possibility that the increase is an A-B-C corrective structure (white) and that in which it is a five-wave increase (black).

If the XRP increase is an A-B-C structure, it is possible wave C will have 1.61 times the length of wave one. This leads to a high of $0.70, very close to the channel’s resistance trend line.

XRP Positive Wave Count
XRP/USD Daily Chart | Credit: Valdrin Tahiri/TradingView

If the increase is a five-wave upward movement instead, wave 3 will likely end at the channel’s resistance, while wave five will trigger a breakout. In both cases, XRP will increase to at least the channel’s resistance trend line.

Despite this bullish XRP price prediction, a daily close below the channel’s resistance trend line will invalidate the positive sentiment. In that case, XRP could fall toward the next closest support at $0.35.

XRP Could See Positive July

After creating a bullish pattern and fractal in July, the XRP price could see a significant increase soon. This will be confirmed by a breakout from the short-term descending resistance trend line. The wave count, price action and indicator readings all support this increase.

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
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