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Will $0.6 support hold despite major token release?
The cryptocurrency market saw a notable surge on Monday, with Bitcoin up 2% to break the $70,000 barrier. After a slow weekend, this resurgence of recovery sentiment had a positive impact on major altcoins, with Ethereum and Solana recording gains of over 3%, trading at $3,383 and $190, respectively. XRP price analysis saw a 1.5% increase, pushing its value above $0.6. While the overall market trend seems bullish, the upcoming release of tokens from escrow wallets could put further pressure on XRP supply.
XRP Price Analysis: Bullish Pennant Signal Coming Soon
Since mid-July, the XRP Price The analysis has shown a slow trend that resonates within a narrow range of two covering trendlines. The daily chart projects long wick candles with narrow bodies that indicate no clear initiative by buyers or sellers.
However, a closer look at the 4-hour chart shows this consolidation as a bullish pennant pattern. This continuation pattern suggests temporary consolidation for XRP before the next jump.
XRP Price Analysis | Tradingview
At press time, XRP price was trading at $0.61, while the market cap stood at $34.1 billion. Despite the bullish narrative, an impending exit of Exchange rate risk token via escrow wallet could slow recovery momentum.
According to XRPScan data, the escrow wallet will release 500 million tokens, worth about $300 million, into the circulating supply on August 1. The supply could support sellers to break the psychological support of $0.6.
XRP Scan
Ahead of the expected pullback, the lower trendline of the pennant and the slope of the 50-hourly EMA from the 4-hourly could provide adequate support.
Also, a potential golden cross between the 50D and the 200D EMA could accelerate the bullish momentum to counter the increase in supply.
Breaking above the pennant pattern would indicate that the market has successfully absorbed the newly released XRP tokens, encouraging buyers to target the major resistance trendline established in September 2021. Furthermore, a daily RSI reading above 60% suggests that trader sentiment towards XRP remains bullish.
A successful break of the upper trendline will signal a major trend reversal and strengthen the rally to $0.92, followed by $1.4.
Key conclusion
The current consolidation in XRP price analysis could be attributed to the delay in liquidation in Ripple Against the SEC court case. Additionally, an upcoming release of XRP tokens via escrow wallets could add further supply pressure on the asset. Therefore, cryptocurrency buyers should be on the lookout for a breakout of the pennant pattern to gain confidence for a potential rally.
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Frequent questions
A cryptocurrency escrow wallet is a secure third-party escrow account used to store digital assets such as tokens or coins. In the case of XRP, Ripple uses escrow wallets to manage the controlled release of XRP tokens to the market.
A golden crossover is a bullish technical indicator that occurs when a short-term moving average crosses a long-term moving average.
A potential break of the pennant pattern resistance will accelerate the bullish momentum to break above the $0.7 handle.