XRP may need to undergo a short selloff period before confirming the upside continuation setup as whales demonstrate bullishness.
XRP (XRP) price may rally over 20% in the coming weeks thanks to a classic bullish continuation setup.
XRP price enters bull flag breakout stage
The so-called bull flag pattern develops when the price consolidates inside a parallel channel after a strong uptrend. It resolves after the price breaks above the upper trendline with convincing volumes and rises by as much as the previous uptrend's height.
As of Nov. 26, XRP was trading above its bull flag's upper trendline, albeit accompanying weaker volumes. That technically indicates a weaker conviction among traders about XRP's bullish continuation.
The duration of traders' indecisiveness could have XRP price test the flag's upper trendline as support. That means a decline toward $0.59, coinciding with a historical support level and the 50-day exponential moving average (50-day EMA; the red wave), by November.
This level is also around XRP's downside target on the weekly timeframe chart.
XRP may then climb toward $0.75 in December, up over 20% from current price levels, if the bull flag scenario holds, and is characterized by a high-volume rebound from the upper trendline.
Conversely, breaking below the flag's upper trendline would delay the bullish continuation setup, bringing the lower trendline near $0.54, coinciding with the 200-day EMA (the blue wave), into play as the next downside target.
On-chain data shows XRP accumulation
XRP's on-chain data looks tilted toward bulls thanks to strong accumulation among its richest addresses.
Notably, the cryptocurrency's correction period has coincided with an increase in its supply among addresses with a balance between 100,000 and 10 million tokens. In total, these so-called "whales" have purchased $6.82 million worth of XRP tokens over the past week.
#Ripple | On-chain data shows that #XRP whales have purchased around 11 million $XRP over the past week, worth roughly $6.82 million! pic.twitter.com/VnWpaMoOYR
— Ali (@ali_charts) November 25, 2023
In other words, these whales are buying XRP at the likely local lows, indicating their conviction about a price rise in December, which corresponds with the bull flag setup presented above.
SEC vs. Ripple decision looms
XRP's price has soared nearly 85% so far in 2023, with Ripple's partial win against the U.S. Securities and Exchange Commission (SEC) serving as the primary bullish catalyst. However, the court must still decide whether Ripple's XRP sales to institutional investors broke U.S. securities laws.
Related: Ripple lawyer urges fact-check of Gary Gensler’s speech, says SEC actions seen as ‘shady’
The trial between Ripple and the SEC will reportedly resume on April 23, 2024, with legal experts seeing a huge likelihood of a settlement. John Deaton, a crypto attorney, notes that any settlement below $20 million will be a 99.99% win for Ripple.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
