XRP price continues to consolidate between two crucial converging trendlines. As the asset rolls up, it prepares for a massive breakout that will result in an explosive run-up or run-down. However, on-chain stats suggest that this move is likely to favor the bulls.
Ripple bulls await volatility
XRP price action from December 2021 has created two lower highs and two higher lows. Drawing a trendline along these swing points reveals the formation of a symmetrical triangle. While this technical formation has no breakout bias, it predicts a 46% move obtained by measuring the distance between the initial swing high and swing low.
Adding this distance to the breakout reveals the theoretical target for the setup. A bullish breakout puts the XRP price at $1.24, while a bearish breakout could send the remittance token down to $0.362.
An educated guess suggests that consolidation will continue for another week or two before a breakout occurs. However, judging by the recent bullishness in the market, XRP price is likely to see a bullish move when it comes out of the symmetrical triangle.
The delivery distribution map shows that XRP whales have been busy collecting the remittance token. Whales with 10 million or more XRP tokens jumped from 317 to 337 between February 6 and 21. This 6.3% increase serves as an indication of their investment interests, indicating that these investors are interested in XRP at current price levels, supporting a bullish break out of the symmetrical triangle.
The bullish outlook makes sense. However, market participants should also consider the bearish scenario to manage their risks. Often triangles get a fake out before the price reverses in the actual direction. Such an opportunity could arise for XRP mainly due to the liquidity present below the equal lows formed at $0.509.
Therefore, an alternate scenario calls for a short pit below USD 0.509, allowing market makers to accumulate liquidity. This move is likely to be caught by buyers collecting XRP at a discounted price, triggering a bull rally.
Conversely, a grim scenario would cause XRP price to hit a daily candlestick that closes below USD 0.509. This move would create a lower low and invalidate the transfer token bullish position. Such a development would suggest a continuation of the downtrend, pushing XRP price towards the forecasted level of $0.362.
This post Whales continue to collect XRP; is it the right time to enter the market?
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