XRP’s Month of Momentum
XRP has experienced notable gains recently, primarily fueled by trader confidence surrounding Ripple’s ongoing legal tussle with the SEC. In fact, XRP’s price soared 25% in the thirty days following the filing for an immediate ruling on the status of XRP sales under U.S. securities laws. To put this in perspective, Bitcoin (BTC) and Ether (ETH) have dipped by 4% and 11% respectively over the same period. Talk about a plot twist!
Technical Analysis: The Bull Pennant Formation
Now, let’s talk charts. XRP has formed what’s known as a bull pennant—essentially a bullish continuation pattern that signals the potential for an upward breakout after price consolidation. This setup has been observed on XRP’s daily chart since late September. Having previously attempted to break above this pennant twice without success, XRP is gearing up for yet another breakout attempt in the coming days.
Theoretically, if XRP successfully breaks out of this pennant formation, it could push prices towards $0.63, reflecting a robust 35% rally as the bullish momentum accumulates.
On-Chain Insights: Accumulation Trends
XRP’s optimistic outlook is supported by on-chain analytics indicating strong accumulation. The metric known as mean coin age, which tracks the average duration tokens have been held since their last purchase, has been increasing since September. This suggests that many investors are choosing to hold onto their XRP rather than sell it off for the time being.
Moreover, Whale Alert has reported substantial movements of XRP from exchanges, with over $126 million being transferred to unknown wallets since October 14, indicating a decreasing supply readily available for sale. This could signal a confident investor base anticipating upward price action.
Legal Landscape: Ripple vs. SEC
The overriding bullish sentiment for XRP largely stems from the anticipation of a potential legal victory for Ripple against the SEC. A key piece of the company’s defense involves a 2018 speech by former SEC official William Hinman, in which he stated that Ethereum was not considered a security despite its ICO. Ripple argues that the SEC should extend this same courtesy to XRP.
As Ripple prepares for the court’s decisions, XRP has already demonstrated volatility—following news about the court rejecting SEC’s requests to keep significant documents private, XRP jumped 12% within 24 hours. Ripple CEO Brad Garlinghouse is aiming for a resolution in the first half of 2023, though he admits predicting the outcome remains challenging.
The Bottom Line: What’s Next for XRP?
With a seemingly bullish landscape ahead and an active accumulation trend, XRP might be well-positioned for continued gains—assuming the legal winds blow favorably for Ripple. However, as with all investments, potential traders should tread carefully. Always keep in mind that while roller coasters can be thrilling, they come with their ups and downs. Are you ready for the ride?
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