XRP is still in a corrective phase after falling 13% from this year’s high, but strong fundamentals and bullish chart patterns suggest that the price is likely to break out to the $5 level.
XRP Surges as Cup and Handle Pattern Forms
Technical analysis indicates that Ripple (XRP) will eventually break out bullishly. The daily chart shows that the coin has formed a cup-handle pattern since January of this year.
The top of the cup is at $3.40, while the bottom is at $1.6135, the low from February. XRP has completed the cup portion and is currently in the handle phase.
Notably, a small inverted head and shoulders pattern has formed within the handle section. The coin also remains stable above the 50-day and 100-day moving average, indicating that buyers are still in control.
XRP has also bottomed out at a key support/resistance level on the Murrey Math Lines tool. These technical indicators increase the likelihood of a breakout, which would be confirmed if the price surpasses this year’s high of $3.65.
Surpassing this threshold could open the door towards the psychological milestone of $5. The bullish outlook would be invalidated if the price drops below the strong reversal level of $2.73.
XRP Ledger is Performing Well
Another key factor driving XRP's price is that the XRP Ledger is performing well, a trend that will continue following recent acquisitions. Data shows that the total value locked in the ledger has increased by 16% over the past 30 days, reaching $85 million.
Additionally, the amount of stablecoins in the network has surged to over $167 million, largely driven by Ripple USD (RLUSD). The supply of RLUSD has skyrocketed to $642 million this year.
The XRP Ledger is set to see a significant increase in activity as Ripple brings Hidden Road transactions onto the network. Additionally, Ripple may utilize its recent acquisition of Rail to boost its stablecoin strategy.
Approval of the XRP ETF Will Drive Demand
A significant potential catalyst is the Securities and Exchange Commission (SEC), led by Chairman Paul Atkins, a cryptocurrency supporter, which may approve most or all pending XRP ETF applications. This approval could lead to billions of dollars in capital inflows by the end of this year or 2025.
For example, approved XRP ETFs from ProShares and Teucrium have attracted millions in assets in recent months. Traditionally, institutional investors tend to avoid leveraged ETF funds, meaning spot funds may see stronger growth.