NOIDA (CoinChapter.com)— The recent XRP price action is nothing to write home about, but traders have remained endlessly hopeful of a bullish XRP price in the token’s future. Yet, XRP price action has remained spectacularly mundane over the past few weeks.
Recently, Ripple CEO Brad Garlinghouse shared a rather bullish market projection, stating that the crypto market cap could reach $5 trillion by 2024. Over the last three months, the XRP price has fluctuated between $0.7 and $0.49, highlighting the volatility in the token.
However, traders remained bullish on the Ripple token, now relying on technical patterns.
Analyst Sets $7.5 Price Target
An independent crypto trader and analyst, Maximus Prime, highlighted that the Ripple token was moving inside a bullish continuation pattern called the ‘symmetrical triangle.’
As the pattern develops over time, a series of lower highs and higher lows converge to a point, giving it its triangular appearance.
Traders generally regard symmetrical triangles as neutral patterns that can break out in either direction. They often wait for a decisive breakout above or below the triangle’s boundaries with increased volume to confirm the pattern’s resolution.
The apex of the triangle is the point where the two trend lines converge, and breakouts tend to occur before the price action reaches this point. As the price action narrows, the volume trend should decrease, which often happens as the market consolidates within the pattern.
Traders typically expect a significant increase in volume to validate the breakout. Per the analyst’s prediction, XRP price is primed for a 1,272% price rally to the pattern’s theoretical price target near $7.5.
However, the symmetrical triangle’s dual potential could cause the XRP price to break below the pattern, resulting in a 90% drop.
Is The Bullish XRP Price Prediction Realistic?
Meanwhile, Messari data shows that the number of XRP whale, shark, and shrimp wallets has increased, indicating the likelihood of bullish sentiment among investors. Addresses with greater than 1 million XRP tokens could include exchange wallets.
As such, the addresses with 100,000 XRP tokens are a better indicator of market sentiment. The increase in the number of shrimp and shark wallet addresses suggests buyers are returning to the market, especially with new updates in the Ripple-SEC lawsuit.
Ripple’s Chief Legal Officer, Stuart Alderoty, quashed hopes of a potential settlement with the US Securities and Exchange Commission. As such, an adverse update in the lawsuit could force traders to flee the market.
XRP price, which is currently testing the support trendline of the triangle pattern, would be hard-pressed to remain inside the setup and continue the bullish narrative.
The SEC is looking for nearly $2 billion in penalties against Ripple. If the regulatory body succeeds, it could mark significant selling pressure for XRP
Ripple might be forced to liquidate its XRP holdings to pay the fine, which would result in a supply shock to the market and a likely price crash for the token.
Furthermore, the ongoing uncertainty has rendered XRP a less attractive option for investors looking for stable returns. Analysis by CoinChapter analyst Yashu Gola earlier this month highlighted XRP’s inherent price volatility and its decreased utility in cross-border payments due to these fluctuations.
Hence, a price prediction with a 1,200%+ upside target seems more like a pipe dream than an analysis. A bullish breakout might help the XRP price reach $1 before the token pares gains.
Being bullish or bearish is a trader’s right, but being high on hopium is a trader’s folly.
