XRP, Cup and Handle Breakout Signal ON...Must Break Through 1.57 Billion XRP Supply Wall for 'Uptrend'

▲ XRP

XRP showed a cup and handle pattern breakout signal, but a supply wall of 1.57 billion XRP accumulated in the $1.41-$1.42 range has emerged as a key test blocking a 17% upside target.

According to cryptocurrency media outlet BeInCrypto on May 6 (local time), XRP moved within a cup and handle pattern from March to early May. The cup phase formed from March 23 to April 17, and the handle phase continued from April 17 to May 2. Subsequently, the handle breakout above the descending channel was completed on May 2, confirming a short-term technical reversal signal.

The bullish signal also appeared in the Relative Strength Index (RSI). From February 7 to April 29, XRP price made lower lows, but the RSI formed higher lows. BeInCrypto described this trend as a standard bullish divergence, indicating a potential reversal at the end of a downtrend. After the bullish divergence occurred on April 29, the cup and handle breakout followed within three trading days, and XRP rose more than 6% since April 29.

The moving average structure also supported the possibility of a short-term momentum shift. XRP is trading above the 20-day exponential moving average (EMA) at $1.400 and the 50-day EMA at $1.408, and the two lines are converging. A bullish cross where the 20-day EMA moves above the 50-day EMA could confirm a short-term momentum shift. Previously, XRP rose 11.43% after moving above the 20-day EMA on April 13, also surpassing the 50-day EMA.

However, on-chain indicators are putting pressure on the breakout trend. The change in XRP exchange net position increased from approximately 37 million XRP on May 4 to approximately 46 million XRP on May 5. This means that the inflow of XRP into exchange wallets increased, which was interpreted as a signal of selling pressure amid a bullish trend. Furthermore, according to Glassnode data, 1.57 billion XRP are accumulated in the $1.41-$1.42 range. The biggest concern is that buyers in this range may approach their breakeven point and potentially trigger selling.

The next supply zone is 414 million XRP in the $1.47-$1.48 range. If XRP absorbs the supply in the $1.41-$1.42 range without strong selling, the next test will be $1.47-$1.48. In terms of price, $1.435 is the first resistance level, and if the daily closing price surpasses this range, $1.462 and $1.490 are suggested as the next target ranges. A clear breakthrough of $1.490 opens the path for an increase to $1.529 and $1.551.

BeInCrypto stated that if XRP forms a daily closing price above $1.551, the measured target of the cup and handle pattern will be activated, and $1.811, reflecting an upside potential of approximately 17%, will be suggested as the target price. Conversely, if $1.401 is maintained, the pattern structure remains intact, but if it breaks down, $1.345 is mentioned as the next major support level. Below $1.345, $1.277 is suggested as a long-term bottom, and if it falls below $1.277, the cup and handle pattern is invalidated.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. This content should be interpreted for informational purposes only.*