XRP’s price: 25% Rally Anticipated as Cup-and-Handle Forms Amid Exchange Outflows
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On the four-hour chart, XRP’s price has formed a cup-and-handle pattern, a technical indicator often signaling strong bullish momentum. Could this positive chart formation and decreasing exchange balances indicate the beginning of a sustained price recovery above $3.00?
Exchange outflows back XRP bulls
Data from Cointelegraph Markets Pro and TradingView shows the XRP/USD pair increased by 3.5% to $2.63 on February 17.
Following a sell-off in early February that drove the price down 44% to a low of $1.76, XRP
price has since rebounded, gaining 10% in the past week.
Technical setups on shorter timeframes suggest potential upward movement for XRP, particularly as exchange flow data has turned negative, indicating more XRP is leaving exchanges than entering.
The chart below illustrates this shift, showing that net XRP spot exchange flows turned negative (red) on February 16 after a three-day period of inflows. This reduction in available XRP on exchanges theoretically eases selling pressure and could positively impact XRP’s price.
XRP spot inflow/outflow. Source: CoinGlass
Notably, XRP exchange flows have largely remained negative since a significant 500% price surge in November. This suggests that investors largely held onto their XRP and did not take substantial profits despite the price appreciation.
Related: Bitcoin trades in a tight range as XRP, LT, OM, and GT aim to move higher
Furthermore, CryptoQuant data reveals a declining trend in XRP supply held on exchanges since mid-November 2024. This period coincides with a substantial 330% rally in XRP’s price.
XRP supply on exchanges. Source: CryptoQuant
XRP’s cup-and-handle eyes $3.40
Technically, the XRP/USD pair has been forming a cup-and-handle pattern on its four-hour timeframe since February 1.
The cup-and-handle is a technical chart pattern identified by an initial price decline followed by a gradual recovery resembling a U-shape, forming the “cup.”
Subsequently, the recovery is followed by a brief pullback, with the price trending downwards within a descending channel, creating the “handle.”
The pattern typically concludes with a price breakout above the handle, leading to a rally approximately equal in magnitude to the preceding decline. The daily XRP/USD chart below illustrates this potential bullish setup.
XRP/USD daily chart. Source: Cointelegraph/TradingView
Currently, XRP price is trading within the handle range and attempting to recover towards the neckline resistance at $2.75.
A confirmed four-hour candlestick close above this neckline could propel XRP price towards the resistance around $2.84.
Breaking through this barrier would pave the way for the pattern’s technical target of approximately $3.40, representing a potential 25% increase from the current price level.
This bullish outlook aligns with the views of several analysts, including Dark Defender, who suggests XRP needs to overcome the $2.77 resistance to target $3.
“XRP is trying to claim the $2.7740 level. If successful, then $3 will be in play. Breaking this channel heralds 2 Digits levels first!”
Analyst Kwantxbt also indicated that bullish divergence observed in daily momentum indicators could drive the price towards the $2.85 to $3.15 area.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
