In a new technical analysis, crypto analyst Dark Defender has identified a bullish ‘Cup and Handle’ pattern on the daily chart of XRP, indicating the potential for substantial gains. The pattern, which is characterized by a “cup” resembling a rounded bottom and a “handle” indicating a slight downtrend, suggests a continuation of an uptrend.
dark defender grades, “XRP formed a cup and handle pattern on the daily time frame. We set targets of $1.05 and $1.88 with Elliott Waves, and now the Cup-Handle pattern is also flashing XRP to hit the targets.”
Cup and Handle Pattern Suggests 208% Rally in the Near Term
The cup formation, which began in July and extended into October, peaked around $1.05, a critical resistance level. The price of XRP then fell by approximately 52%, perfectly aligning with the classic setup. Ideally, the correction from the top of the glass to the bottom should be a maximum of 50%.
The trailing handle has formed a resistance zone between $0.75 and $0.6649, which is roughly a 20% retracement from the peak of the cup. In particular, the pattern suggests a bullish continuation, where the “cup” represents a period of consolidation followed by a breakout, while the “handle” forms a smaller pullback before the price continues to rise.
Within the chart, Dark Defender shows key support and resistance levels crucial for this pattern to remain valid. The handle portion of the pattern has potential support at $0.5286, which Dark Defender has indicated should not be broken with a close below the main support at $0.6044 for two consecutive days to maintain the bullish outlook.
Currently, the chart indicates that XRP is trading above these support levels, with resistance lurking above. The next significant resistance is seen within the handle formation, marked at $0.6649. A decisive break above this level could confirm the predicted outcome of the pattern and put XRP on its upward trajectory towards the mentioned price targets.
The analyst details possible moves for the handle, stating: “Can the handle extend towards the support at $0.5286? We are yet to close below the main support at $0.6044 for 2 days in a row. So the answer right now is No.” However, he also added: “The main structure is still in place, and XRP is expected to reach $1.05 and $1.88 in the near term.”
XRP price faces stiff resistance
XRP price is currently facing another crucial resistance by performing a Fibonacci retracement level analysis on the 1-day chart. Last Thursday,
Furthermore, XRP price is between the 20-day and 50-day exponential moving average (EMA), between $0.6234 and $0.5919. For the bullish scenario to play out, the price must break above the 20-day EMA and the 0.382 Fibonacci level. If this happens, Dark Defender’s bullish prediction could get a little closer.
Featured image from iStock, chart from TradingView.com