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▲ Photo: XRP
XRP is increasing its potential for a 12% upside breakout amid institutional fund inflows and easing exchange selling pressure. BeInCrypto reported on May 14 (local time) that XRP is moving within a cup-and-handle structure, and if it breaks above $1.51, it could rise to $1.68.
According to BeInCrypto, a cup-and-handle pattern formed on XRP's daily chart from April 17 to May 10. The cup portion was created over approximately three weeks, and a downward channel has been acting as the handle since May 10. The depth of the cup was measured at about 12%, and a price target of the same magnitude was suggested upon a neckline breakout.
Volume flow was interpreted as a positive signal. This is because buying pressure entered during the downward phase while selling volume decreased in the handle region. However, BeInCrypto pointed out that there have been instances where XRP's past cup-and-handle structures did not lead to an actual breakout, emphasizing that breakout confirmation is key this time as well. XRP has risen 1.7% over the past seven days.
Institutional fund flows also showed recovery. According to SoSoValue's weekly data, XRP spot ETF products recorded a net outflow of $35,210 in the first week of May, then turned to a net inflow of $34.21 million in the week ending May 8. Furthermore, as of May 13, the current week also recorded a net inflow of $31.11 million. BeInCrypto stated that two consecutive weeks of net inflows exceeding $30 million coincided with the XRP price adjustment in the handle region.
Smart money indicators also improved. The smart money index, which tracks the positions of well-informed traders compared to retail investor flows, rebounded from a local low near 2.40 and currently stands at 2.42. BeInCrypto explained that this trend is similar to the movement on April 19, when smart money positions rose first, followed by the XRP price.
Exchange selling pressure significantly decreased in just one day. According to Glassnode's exchange net position change data, XRP flowing into exchanges decreased from 38,088,506 XRP on May 12 to 14,067,566 XRP on May 13. This represents a 63% reduction in XRP inflow to exchanges in a single day, indicating a sharp weakening of selling pressure.
Technical hurdles were concentrated at $1.50 and $1.51. XRP was trading at $1.42 at the time of writing, and the neckline of the cup pattern was gathered around $1.50 and $1.51. BeInCrypto analyzed that a daily close above $1.44 would signal the first handle breakout by overcoming the descending channel resistance, and a convincing daily close above $1.51 would confirm a cup breakout.
In the upward trend, Fibonacci 0.236 retracement line at $1.44, Fibonacci 0.382 retracement line at $1.47, Fibonacci 0.5 retracement line at $1.49, and Fibonacci 0.618 retracement line at $1.51 were presented as key resistance levels. If a breakout above $1.51 is confirmed, the 12% upside target of $1.68 will open up, aligning with the Fibonacci 1.618 extension line at $1.67.
On the downside, a daily close below $1.41 was presented as a condition that would weaken the current structure. In this case, the next support level is $1.38, and a daily close below $1.34 was mentioned as the level that would completely invalidate the cup-and-handle structure. BeInCrypto stated that XRP is currently in a phase where it is determining its direction between the $1.51 neckline and the $1.34 invalidation level.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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