Big compression in XRP anticipates explosive move

  • If this movement continues its trend, XRP would shoot higher.

  • The rise of bitcoin favors the rise of cryptocurrencies.

XRP continues to consolidate a bullish pennant, a figure that reflects optimism among its investors.

In trading, a pennant is a technical analysis indicator that It is characterized by a period of consolidation in the market. It is formed when the prices of a digital asset stabilize after an upward movement.

The pattern is characterized by a strong initial movement, known as the flag, followed by a compression phase, in which the price highs and lows progressively narrow until forming the pennant. This compression usually precedes an explosive movement, in the same direction as the previous trend, that is, upward.

As CriptoNoticias has reported, the price of the cryptocurrency issued by Ripple Labs has had great growth after Donald Trump’s victory in the United States elections and It reached a high of $2.90, price levels not seen since early 2018.

From that moment, XRP price registered a bearish correction and now it remains close to the $2.40 area. As seen in the TradingView chart below, it is during that period that the XRP pennant formed.

A bullish pennant formed in the XRP price. Source: TradingView.

In addition to this technical pattern, There are factors that suggest that XRP could enter a new bullish cycle. In principle, because the rise of bitcoin (BTC) favors the rest of the cryptocurrencies.

Historically, the good performance of the currency created by Satoshi Nakamoto encourages investor interest in risk assets, which motivates demand for other cryptocurrencies, such as XRP.

The other issue that must be noted is that Ripple Labs is about to launch its RLUSD stablecoin on the market.

The financial product that has 1:1 parity with the dollar was approved by the New York Department of Financial Services (NYDFS) and will soon be available on BTC and cryptocurrency exchanges.

However, the most important thing to highlight is that RLUSD operates on both the Ethereum network and the XRP Ledger, whose native currency is XRP.

If the stablecoin is successful, Transaction volume on XRP Ledger will increase, driving demand for XRP. This could put upward pressure on the price of the Ripple digital asset.

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