NOIDA (CoinChapter.com)— XRP’s recent price action reflects growing investor confidence despite the initial euphoria following Ripple’s partial legal victory against the SEC beginning to fade. Following a brief rally on August 12, XRP prices continued charting green candles on the chart.
Market participants are now turning their focus to the long-term implications of the court’s rulings on Ripple and XRP, particularly the financial burden of Ripple’s $125 million civil penalty and the constraints imposed on the token’s market utility within the U.S.
Moreover, with the possibility of an SEC appeal looming, legal uncertainties continue to weigh heavily on XRP’s future, casting doubt on its viability in the cross-border payments space. However, despite the worries, the XRP USD pair is not lacking in bullish cues.
Bullish Signals Amidst Mixed Sentiment
While XRP’s recent price action has shown signs of hesitation among investors, there are underlying bullish signals that suggest potential for upward momentum.
The steady decline in XRP’s supply on exchanges is a key bullish indicator. It signals reduced selling pressure as investors increasingly move their tokens off exchanges and into private wallets. The behavior often points to accumulation, indicating that market participants are holding onto their XRP in anticipation of future price gains.
In addition, wallet distribution metrics reveal that both mid-sized and large holders are increasing their XRP holdings. Notably, wallets holding between 1,000,000 and 100,000,000 XRP have shown significant accumulation over the past few weeks.
The trend suggests growing confidence among more sophisticated investors, including institutions and high-net-worth individuals, who are likely positioning themselves for a potential price increase.
However, it’s essential to acknowledge a minor bearish angle: the recent spikes in network realized profit/loss, which indicates that some traders are taking profits during upward movements. The profit-taking suggests that not all market participants are fully convinced of a sustained rally, and it could lead to temporary price pullbacks.
Despite this, the overall supply dynamics and accumulation trends among larger holders present a bullish scenario for XRP, with the potential to overcome short-term profit-taking and drive future price appreciation.
Bullish Cues From XRP Technical Setup
Meanwhile, the XRP USD pair has formed a bullish technical setup called the ‘bull pennant.’
The bull pennant pattern is a classic technical indicator suggesting the potential continuation of an existing upward trend. This pattern emerges when the price of an asset consolidates within a narrowing range after a strong upward move, creating a shape that resembles a small, triangular flag.
The pattern is characterized by two converging trendlines that connect the high and low prices during the consolidation phase. During this phase, trading volume usually decreases, signaling market indecision as traders await the next significant move.
For the bull pennant to confirm a bullish continuation, a breakout above the upper trendline is essential, ideally accompanied by a substantial increase in volume. This volume surge indicates robust buying pressure, reinforcing the likelihood of continued upward momentum.
However, if the breakout occurs without a significant increase in volume, the risk of a false breakout rises. In this case, the price may fall back into the pennant’s range, potentially signaling a reversal.
According to technical analysis principles, if the XRP USD pair successfully breaks out of the bull pennant, it could theoretically target a level nearly 66% higher than its current price, suggesting a potential rise to approximately $0.96.
