The price of Ripple’s native token, XRP, has been on a roller coaster ride in recent years. After reaching a peak of nearly $2 in April 2021, it has been on a downward trend, leaving investors wondering if a comeback is on the horizon.
However, a recent analysis by market analyst Jonathan Carter suggests that XRP could be on the verge of a significant breakthrough.
XRP trapped in a symmetrical triangle
Carter’s prediction hinges on a technical chart pattern known as a symmetrical triangle. This pattern is typically formed by oscillating between an upper and lower trendline where prices converge during a sideways trend.
XRP has been trading within this triangle for several years, indicating a potential struggle between buyers and sellers.
Support for retest fuel breakthrough hope
The recent April price decline, reflecting a broad market correction, has led XRP to retest the lower trendline of the symmetrical triangle.
In technical analysis, these retests are often seen as a harbinger of a breakout, where the price decisively breaks one of the trend lines. Carter believes this retest signals an imminent rise for XRP.
Ripple is bouncing off the lower trend line of a symmetrical triangle on the weekly chart🧐
A successful breakout of this triangle would be a bullish signal with medium-term targets of $0.93 and $1.68🎯. pic.twitter.com/sbZXfEYMCM
— Jonathan Carter (@JohncyCrypto) May 6, 2024
Undervalued XRP? MVRV Ratio Hints for Opportunities
Adding fuel to the fire is the MVRV ratio, a metric used to measure whether an asset is overvalued or undervalued. XRP’s current MVRV is a low -0.5733, indicating that the token is trading well below its historical average price.
This can be interpreted as a signal of undervaluation, potentially attracting investors looking for undervalued opportunities.
Analysts expect a medium-term target of $1.68.
Following a positive ruling in the current SEC dispute, Carter expects XRP to see an initial surge to $0.93, a level it briefly touched in July 2023, in case of a breakout from the symmetrical triangle.
XRP market cap currently at $28.8 billion. Chart: TradingView.com
However, Carter believes that XRP will overcome this level of resistance this time to achieve its more ambitious medium-term target of $1.68. Achieving this goal would require a remarkable price increase of 213% from the current price of $0.53.
XRP seven-day price action. Source: CoinMarketCap
Experts urge caution despite optimistic outlook
Carter’s analysis presents a bullish outlook for XRP, but financial experts advise caution. Cryptocurrency markets remain highly volatile and unexpected events can cause significant price fluctuations.
Additionally, the ongoing litigation between Ripple and the SEC regarding XRP’s classification as a security continues to cast a shadow over the token’s future. A negative outcome from the lawsuit could dampen investor sentiment and hinder a potential price surge.
Featured image from iStock, chart from TradingView
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Source: NewsBTC.com