In the chart shared by crypto analyst Ali Martinez, XRP has broken out of the descending channel typically identified as a 'bull flag,' indicating that its recent upward trend may continue. Based on Fibonacci extension levels, this move lays the foundation for a push towards $4.40.
The price of XRP is $4.40
According to the two-hour chart provided by Binance, XRP initially rebounded from around $2.3374 on January 13 to a local high of $3.3509 on January 17, marking a swift increase and establishing what is known as the flagpole. After reaching the local high of $3.3509, the price entered a consolidation phase, moving within a downward channel from January 17 to January 19, briefly dipping below the 0.786 Fibonacci retracement level of $3.1021 before rebounding.
The breakout above the upper limit of the channel, occurring around $3.20 on January 20, is seen as a classic confirmation of the bull flag. The bull flag pattern consists of two key parts: a rapid, nearly vertical ascent (the flagpole) and a subsequent, more gradual consolidation (the flag). When an asset's price decisively closes above the upper trendline of the flag, traders typically interpret it as a signal that the previous upward trend may resume.
In this specific setup, the distance of the flagpole from the swing low of $2.3374 to the swing high of $3.3509 yields a gain of approximately $10.01. The analyst then adds this distance to the breakout level near $3.20 to approximate a price target in the $4.20 area.
However, Martinez's chart also includes Fibonacci extensions that provide finer potential targets, fixed at 0% ($2.3374) and 1 ($3.3509). These extensions occur at 1.272 ($3.6958), 1.414 ($3.8889), 1.618 ($4.1863), and 1.786 ($4.4475). The analyst sets $4.40 as the primary bullish target, closely related to the 1.786 extension level.
According to Martinez's chart, XRP is trading near $3.29, hovering around the local high of $3.3509. If the cryptocurrency can maintain above the breakout area and eventually surpass $3.3509, the technical indications on the chart suggest a potential continued rise within the $3 range, ultimately reaching $4.40.
The significance of the $4.40 target lies in its alignment with the classic bull flag prediction trend, providing traders with a clear upward signal to observe ongoing momentum. While short-term fluctuations are always possible in the volatile crypto market, the breakout from the flag consolidation offers a clear bullish signal, contingent on XRP's ability to maintain support around $3.20 and build sufficient trading volume to break through the $3.3509 threshold.
Notably, XRP was unable to defend against the breakout. At the time of the report, XRP had retraced back into the channel, trading at $3.06. Therefore, XRP bulls need to strengthen again to revalidate this scenario.
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