Ripple (XRP) can break out of the current correction pattern and rally to at least $0.43.
Analyst Bill Morgan shared a partial screenshot of Ripple’s fourth quarter 2022 report, showing that Ripple only sells XRP associated with ODL transactions.
This has been the case since June 2019, which may explain why the SEC never pursued the current sale.
As such, the SEC’s only hope is to “penalize sales by 2019.
ascending parallel channel
Since the June 2022 low, XRP has been trading within an ascending parallel channel, although the channel’s upper trendline has not been confirmed enough times. The price is mostly trading in the lower part of the channel.
After forming a bullish candle in the first week of January, the price rebounded strongly and retested the channel’s midline at $0.43. This shows that the bulls are buying aggressively at lower levels.
In addition to the increase in price action, the RSI has produced a clear bullish divergence with its trendline still intact.
Moreover, the bulls are attempting to make a higher bottom at $0.36. If successful, XRP will break out of the channel midline on the next attempt. In this case, the next target is $0.55, which is created by the channel’s resistance line and the horizontal resistance area.
XRP/USDT Weekly Chart | Source: TradingView
Following the market rally since the start of the year, XRP has consolidated within a descending parallel channel. This is a bullish pattern that usually leads to a breakout in most cases.
After bouncing off the channel’s support line on Feb. 13, XRP easily broke through the channel’s midline and is now challenging the channel’s resistance line.
The RSI has now broken the descending resistance line. This move usually results in the same move in the price action line. Therefore, XRP price may break out of the channel and move towards the minor resistance area of $0.43 in the coming days.
Conversely, a rejection could lead the price to retest the channel support line at $0.36 again.
The moving averages are sloping up and the RSI is above 50, suggesting the path of least resistance is to the upside.
XRP/USDT daily chart | Source: TradingView
The most likely price outlook suggests that XRP will break out of the current correction pattern and rally to $0.43. A break above this level could help XRP bounce back towards the $0.55 long-term resistance area.
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