Investors are increasingly placing their bets on the possibility of a breakout in the price of the XRP (XRP) token. Could XRP be ready to experience a surge in momentum?
Traders are increasingly betting on a rise in the price of XRP, as evidenced by the surge in open interest (OI), according to a market analysis conducted by verified CryptoQuant author Woominkyu. In a research report dated June 18, Woominkyu stated:
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XRP Ledger: Open Interest. Source: Woominkyu
However, the author also warned that this could lead to increased price volatility. He explained that XRP’s price has been in a downtrend since the beginning of the year, down more than 19% year-to-date (YTD), currently trading at $0.49, according to data from TradingView.
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XRP/USDT, YTD chart. Source: TradingView
The open interest for XRP started rising on June 11, and the expectations of a breakout could be linked to the developments in Ripple’s legal battle against the United States Securities and Exchange Commission (SEC). On June 13, Ripple requested a penalty of “no more than $10 million,” which is significantly lower than the SEC’s proposed civil penalty of $876.3 million. Ripple cited the SEC’s settlement with Terraform Labs as a basis for their request. However, the SEC argued in a letter to Judge Torres on June 14 that such a low penalty would not serve the purposes of the civil penalty statutes.
A potential settlement in this case would bring relief for investors, as Ripple and the SEC have been engaged in a court fight since 2020, when the SEC accused Ripple of selling unregistered securities.
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Is XRP’s price about to break out?
Based on a significant technical chart formation, the XRP token might be on the verge of a price breakout by the end of June.
The daily chart for XRP shows the formation of a descending triangle, which is a pattern that could indicate a potential price breakout as the triangle’s wedges become narrower. If XRP can maintain its position above the $0.47 support level, it could trigger a rally in its price.
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XRP/USDT, 1-day chart. Source: TradingView
Fractal patterns in XRP also suggest the possibility of a breakout, as long as the price chart follows the patterns observed after February 2024 when XRP’s price broke out of a similar ascending triangle pattern. Technical traders use fractal patterns to identify crucial support and resistance levels, as well as potential trend reversals based on historical data.
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XRP/USDT, fractals chart. Source: TradingView
However, traders must also take into account the potential negative impact of news related to the SEC v. Ripple lawsuit, which could adversely affect the market and potentially cause XRP’s price to fall below its current support level.
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This article does not provide investment advice or recommendations. Every investment and trading decision carries risks, and readers should conduct their own research before making any decisions.