Chain that is torn at sunset
The price of XRP, the native token of Ripple, has been on a rollercoaster ride in recent years. After reaching a peak of nearly $2 in April 2021, it has been in a downward motion, leaving investors wondering if a comeback is on the horizon.
However, a recent analysis by market analyst Jonathan Carter suggests that XRP might be on the verge of a significant breakout.
XRP Stuck In Symmetrical Triangle
Carter’s prediction hinges on a technical chart pattern known as a symmetrical triangle. This pattern typically forms during periods of consolidation, with prices bouncing between converging upper and lower trendlines.
XRP has been trading within this triangle for several years, indicating a potential struggle between buyers and sellers.
Support Retest Fuels Breakout Hopes
The recent price drop in April, which mirrored a broader market correction, saw XRP retest the lower trendline of the symmetrical triangle.
In technical analysis, such a retest is often seen as a precursor to a breakout, where the price decisively breaks through one of the trendlines. Carter believes this retest signifies an imminent upswing for XRP.
Ripple is bouncing from the lower trendline of a symmetrical triangle on the weekly chart🧐
A successful breakout above this triangle would be a bullish signal with mid-term targets at $0.93 and $1.68🎯 pic.twitter.com/sbZXfEYMCM
— Jonathan Carter (@JohncyCrypto) May 6, 2024
Undervalued XRP? MVRV Ratio Hints At Opportunity
Adding fuel to the fire is the MVRV Ratio, a metric used to gauge whether an asset is overvalued or undervalued. XRP’s current MVRV sits at a low -0.5733, suggesting that the token is trading significantly below its historical average price.
This could be interpreted as a sign of undervaluation, potentially attracting investors seeking undervalued opportunities.
Analyst Projects Mid-Term Target Of $1.68
Carter forecasts an initial spike towards $0.93, a level that XRP briefly touched in July 2023 after a favorable verdict in the current SEC dispute, should a breakout from the symmetrical triangle occur.
XRP market cap currently at $28.8 billion. Chart: TradingView.com
Carter, however, thinks that XRP will overcome this resistance level this time around in order to reach its more ambitious mid-term goal of $1.68. It would take an incredible 213% increase from the current price of $0.53 to reach this goal.
XRP seven-day price action. Source: CoinMarketCap
Experts Urge Caution Despite Bullish Outlook
While Carter’s analysis paints a bullish picture for XRP, financial experts advise caution. The cryptocurrency market remains highly volatile, and unforeseen events can drastically alter price movements.
Additionally, the ongoing lawsuit between Ripple and the SEC regarding XRP’s classification as a security continues to cast a shadow over the token’s future. A negative outcome in the lawsuit could dampen investor sentiment and hinder any potential price surge.
Featured image from iStock, chart from TradingView