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The price of XRP, Ripple's native token, has been on a roller coaster ride in recent years. After reaching a high of nearly $2 in April 2021, it has been trending downward, leaving investors wondering if a comeback is on the horizon.
However, recent analysis from market analyst Jonathan Carter suggests that XRP could be on the verge of a significant breakout.
XRP stuck in a symmetrical triangle
Carter's prediction is based on a technical chart pattern known as a symmetric triangle. This trend typically forms during periods of consolidation, with prices bouncing between converging upper and lower trend lines.
XRP has been trading in this triangle for several years, indicating a potential struggle between buyers and sellers.
New test of support fuels breakout hopes
The recent price drop in April, which reflects a broader market correction, saw XRP retest the lower trendline of the symmetrical triangle.
In technical analysis, such a retest is often seen as a precursor to a breakout, where the price decisively crosses one of the trend lines. Carter believes this new test signifies an imminent recovery for XRP.
Ripple bounces off the lower trendline of a symmetrical triangle on the weekly chart🧐
A successful break above this triangle would be a bullish signal with medium term targets at $0.93 and $1.68🎯 pic.twitter.com/sbZXfEYMCM
– Jonathan Carter (@JohncyCrypto) May 6, 2024
XRP undervalued? MVRV ratio hints at opportunity
Adding fuel to the fire is the MVRV ratio, a metric used to assess whether an asset is overvalued or undervalued. XRP's current MVRV sits at a low of -0.5733, suggesting that the token is trading significantly below its historical average price.
This could be interpreted as a sign of undervaluation, potentially attracting investors looking for undervalued opportunities.
Analyst projects medium-term target of $1.68
Carter forecasts an initial peak towards $0.93, a level that XRP briefly touched in July 2023 after a favorable verdict in the current. SEC Litigation, if a breakout of the symmetrical triangle occurs.
XRP market cap currently at $28.8 billion. Chart: TradingView.com
Carter, however, believes that XRP This time around, it will overcome this resistance level in order to reach its more ambitious medium-term target of $1.68. It would take an incredible 213% increase from the current price of $0.53 to reach this goal.
XRP seven-day price action. Source: CoinMarketCap
Experts urge caution despite bullish outlook
Although Carter's analysis paints an optimistic picture for XRP, financial experts advise caution. The cryptocurrency market remains very volatile and unforeseen events can radically alter price movements.
Additionally, the ongoing lawsuit between Ripple and the SEC regarding the classification of XRP as a security continues to cast a shadow over the future of the token. A negative outcome of the trial could dampen investor confidence and hamper any potential price increases.
Featured image from iStock, chart from TradingView
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold investments and, naturally, investing involves risks. You are advised to carry out your own research before making any investment decision. Use the information provided on this website entirely at your own risk.
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