(Akash Girimath – FXStreet)
– XRP price has formed an inverse head-and-shoulders setup, which forecasts a 13% upswing to $0.544.
– The recent breakout is facing headwinds at $0.50 and is currently undergoing a minor pullback.
– A daily candlestick close below $0.471 will invalidate the bullish thesis for Ripple.
XRP price has set up a bullish reversal pattern that is already on its way to reaching its target. However, Bitcoin price is taking a hit due to its correlation with the traditional markets, causing altcoins, including Ripple, to slow down.
XRP price appears bullish
XRP price created an inverse head-and-shoulders pattern between September 25 and October 4. This setup consists of three valleys, with the central one lower than the other two. The one in the middle is the “head,” and the swing lows formed on either side are the “shoulders,” hence the namesake.
The technical formation is a bottom reversal pattern and forecasts a 13% upswing, determined by measuring the distance between the head’s lowest point and the neckline, which is the trend line connecting the peaks of the shoulders. Adding this distance to the breakout point at $0.478 puts the target at $0.544.
XRP price breached the neckline on October 4 and rallied 5.7% but faced headwinds as it approached the $0.50 psychological level. The recent sell-off has pushed the remittance token below a crucial support level at $0.493.
A recovery above the aforementioned level would indicate that the bullish outlook will resume. This development could see XRP price sweep the equal highs formed at $0.508 and $0.519 and extend the run-up to reach its target at $0.544.
Although this setup is bullish, investors should be cautious, and a breakdown of the $0.471 level would create a lower low and invalidate this bullish outlook. In such a case, market participants can expect the XRP price to revisit the $0.45 support level.