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The native token of Ripple, XRP, has seen a wild journey in recent years. Rising about $2 in April 2021, it has been in a declining trend that has left investors wondering whether a comeback is just around.
However, a recent analysis by market analyst Jonathan Carter suggests that XRP might be on the verge of a significant breakout.
XRP Stuck In Symmetrical Triangle
Carter’s estimate depends on a technical chart pattern sometimes referred to as a symmetrical triangle. Usually forming during times of consolidation, this trend shows prices oscillating between converging upper and lower trendlines.
XRP has been trading within this triangle for several years, indicating a potential struggle between buyers and sellers.
Support Retest Fuels Breakout Hopes
XRP retest the lower trendline of the symmetric triangle in April, which reflected a larger market correction’s price decline lately.
Technically, this kind of retest is sometimes considered as a prelude to a breakthrough, in which case the price clearly crosses one of the trendlines. Carter thinks this retest marks XRP’s approaching upward trend.
Ripple is bouncing from the lower trendline of a symmetrical triangle on the weekly chart🧐
A successful breakout above this triangle would be a bullish signal with mid-term targets at $0.93 and $1.68🎯 pic.twitter.com/sbZXfEYMCM
— Jonathan Carter (@JohncyCrypto) May 6, 2024
Undervalued XRP? MVRV Ratio Hints At Opportunity
Fueling the flames is the MVRV Ratio, a measure of asset valuation relative to others. With XRP’s present MVRV of a low -0.5733, the cryptocurrency is clearly selling well below its historical average price.
This could be interpreted as a sign of undervaluation, potentially attracting investors seeking undervalued opportunities.
Analyst Projects Mid-Term Target Of $1.68
Should a breakout from the symmetric triangle take place, Carter projects an initial surge towards $0.93, a level XRP momentarily approached in July 2023 following a positive outcome in the present SEC conflict.
XRP market cap currently at $28.8 billion. Chart: TradingView.com
But Carter believes XRP will conquer this barrier level this time around to meet its more ambitious mid-term target of $1.68. To get to this target, one would need an amazing 213% rise from the present price of $0.53.
XRP seven-day price action. Source: CoinMarketCap
Experts Urge Caution Despite Bullish Outlook
Although Carter’s research presents a positive image of XRP, financial analysts warn readers. The market for cryptocurrencies is still somewhat erratic, thus unanticipated developments can significantly change price swings.
Furthermore clouding the future of XRP is the continuous battle between Ripple and the SEC over its categorization as a security. A lawsuit’s poor result would lower investor confidence and impede any possible price spike.
Featured image from iStock, chart from TradingView
