- The XRP price is trading within an ascending parallel channel and indicates an imminent massive move.
- The SEC’s lawsuit against Ripple appears to give the remittance token more media presence, which inadvertently helps its case.
- Breaking the $ 0.65 support level would undo the bullish outlook and potentially trigger a massive downward move.
The XRP price is going through a bullish pattern on a higher timeframe and is currently bouncing off a stable support level. If this uptrend continues, Ripple could more than quadruple its market value in the coming days.
The general structure of the crypto markets
Bitcoin price has broken the 200-day simple moving average (SMA), which is a massive bullish move. Hence, investors should expect this rally to continue with smaller pullbacks or consolidations.
The uptrend from July 20th to August 8th was the first leg that rekindled the flame in many altcoins, including Ripple, as seen in the chart below.
While the Bitcoin price rose 59% during the period in question, the XRP price climbed 63%, which suggests that altcoins have outperformed the major cryptocurrencies. The same trend can be seen with Ethereum and other altcoins, which suggests that altcoins are facing a massive surge.
So if Bitcoin price continues to consolidate or move upward, altcoins will continue to skyrocket as well.
Performance chart BTC vs. Altcoins
The SEC litigation against Ripple
Despite the boom in the cryptocurrency markets, things are looking relatively bad for Ripple, at least from a non-technical point of view due to the litigation with the Securities & Exchange Commission (SEC).
In the most recent development of this case, the commission made a request to obtain relevant communication protocols between Ripple employees.
According to Ripple executive attorney James Filan, that motion was filed with the Southern District of New York with a request that Judge Sarah Netburn be brought in.
Plaintiff, the Securities and Exchange Commission (“SEC”), is politely requesting a conference prior to filing the motion in which the SEC will request an order to force Defendant Ripple Labs (“Ripple”) to suspend relevant communications between Ripple- Browse and submit to employees on Slack, a messaging application.
The dispute between the SEC and Ripple has been dragging on for about eight months, with no solution or deal in sight. While the lawsuit initially put Ripple on the defensive and cost the company, among other things, its partnership with MoneyGram, the partnerships are sprouting up, especially in the eastern hemisphere.
Ripple’s collaboration with BankDhofar in Oman opened the cross-border transfer channel between the bank in Oman and IndusInd, a private bank in India, via RippleNet.
In addition, the company has also launched the first live implementation of on-demand liquidity. This development is supported by Japan’s largest money transfer provider SBI remit and Coins.Ph, a popular mobile wallet service in the Philippines.
To sum up, Ripple took advantage of the public relations nightmare of litigation to take advantage of the support of Eastern companies. While the case is unlikely to be resolved anytime soon, any positive development, especially a win, will no doubt be a trigger that XRP price needs to rise a whopping 300%.
Chart technique suggests an explosive XRP surge
Regardless of how the litigation ends, the XRP price shows the formation of a multi-month pattern that indicates an upward trend.
Ripple has hit about three higher highs and two higher lows since November 24, 2020. Drawing trend lines connecting these price points shows the formation of a massive ascending parallel channel.
The last two times the XRP price marked the upper limit of the parallel channel, this led to a sell-off. The same goes for the lower trendline rebound seen on July 20th. So far, XRP price has rebounded 75% from that point and is rapidly approaching the midpoint of the channel.
Assuming BTC keeps appearances, Ripple could rise nearly 300% and test the cap, which coincides with the 2018 all-time high of $ 3.317.
However, this climb won’t be a breeze and will encounter headwinds at three points. Ripple has already passed the first barrier at $ 0.771 and is approaching the second at $ 1.090. A crucial candlestick close above $ 1.090 on a daily basis would break the midpoint of the channel and pave the way for further gains.
The final target for the XRP course is the 2018 all-time high which is $ 3,317.
XRP / USDT 1-day chart
While things seem to be going in Ripple’s favor, investors need to watch out for a turnaround that will favor the bears. There are two ways in which the bullish thesis could be invalidated: a rejection in the middle of the channel or a reversal in the major cryptocurrency, which shows that the uptrend so far was a failed attempt at a bull market.
Regardless of what triggers a trend reversal, buyers’ inability to cross the second hurdle at $ 1.090 will indicate weakness. This move could push XRP price as low as $ 0.771, where the bulls could make another attempt to push the price higher.