XRP has been struggling to gain upside momentum over the past couple weeks, with prices declining more than 10% from early November highs of $0.72 to current levels around $0.61.
However, according to prominent Ripple analyst Dark Defender, XRP may be carving out a bullish cup and handle pattern that could precede a rally to $1.05 and even $1.88.
A cup and handle pattern forms as prices decline to carve out a “U” shaped bottoming pattern (the cup) which is joined by a slight ascending price channel (the handle). This classical chart pattern indicates a potential trend reversal, with the height of the cup used to project the magnitude of the subsequent rally.
In XRP’s case, the cup depth from the highs near $0.72 to support around $0.45. Adding that to the breakout level near $0.61 gives an initial price target of $1.05. Extensions of cup and handle patterns can be even larger, which is why Dark Defender sees potential for XRP to reach $1.88.
So far XRP remains above key support at $0.60, which needs to break on a closing basis for two days straight to invalidate the bullish setup, according to Defender. The Relative Strength Index (RSI), a momentum indicator, sits at 42 which leaves room for prices to trend higher before becoming technically overbought. Meanwhile, the Moving Average Convergence Divergence (MACD) has crossed bearishly below its signal line, indicating some near-term downward momentum.
In conclusion, while XRP has struggled in recent weeks, respected analyst Dark Defender sees signs of a bottoming cup and handle pattern that could ignite a rally back to $1 if key support at $0.60 holds. Traders should watch for a decisive breakout above $0.61 to confirm the bullish reversal setup unfolding.
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