Key Points:
XRP whales continue to accumulate during market declines, increasing the likelihood of a market recovery.
The XRP price must hold above the $2.70 support level to continue its push towards the $4 target.
On Wednesday, XRP showed strong momentum, rising 6.8% from a low of about $2.70 on Monday, indicating that traders are adapting to the latest sell-off after an over-leveraged market.
Strong technical setups and on-chain data suggest that the XRP/USD trading pair is well-prepared for a trend reversal towards the $4 level.
Data from Cointelegraph Markets Pro and TradingView shows that XRP successfully rebounded from the downtrend line of a symmetrical triangle on the daily timeframe, as illustrated below.
The symmetrical triangle chart pattern is a classic technical formation where prices consolidate between two converging trend lines, forming a triangular shape. This often indicates that the market is in a state of indecision, with volatility gradually decreasing, and typically foreshadows an impending breakout.
For XRP, a breakout above the $3 resistance line of the triangle would clearly signal that a trend reversal has begun. Such a move could open the path for an upward journey towards the triangle's measured target of $4.08, representing a 42% increase from current levels.
Before reaching the target, bulls need to overcome key resistance levels at $3.40 and the eight-year high of $3.66.
In a deeper analysis, trader and analyst CasiTrades pointed out that XRP has formed "a large downward shadow on the four-hour chart, building a double bottom pattern near $2.70."
"This double bottom pattern still aligns with a valid second wave count model, provided the price can hold above $2.70," she stated in a post on X platform on Tuesday.
CasiTrades believes that the key levels to watch on the downside are the immediate support at $2.79 and the recent low at $2.70. If this level is breached, the support at $2.58 will become the next focal point.
"Looking upward, based on Fibonacci extension levels, the next major resistance targets are $4.00 and $4.40," the trader added.
Cryptocurrency analyst CryptoBull shares a similar bullish outlook, stating that if XRP successfully breaks out of the bull flag pattern, the price could rise to $5 in October.
Multiple indicators show that despite the market sell-off on Monday potentially raising concerns about further declines, XRP's price is still expected to continue its upward trend.
Santiment's supply distribution indicator shows a steady increase in the supply held by entities holding between 1 million to 10 million tokens over the past few days. These addresses now hold 6.77 billion XRP, having accumulated an additional 30 million tokens during Monday and Tuesday. This amount accounts for 11% of XRP's total circulating supply.
In other words, most whale investors did not sell when the price dropped to $2.70 this week but continued to accumulate XRP, indicating their confidence in further price increases.
By buying on price dips, these large holders can alleviate market sell-off pressure and build support levels for the price, encouraging smaller retail investors to follow their investment strategies.
Meanwhile, since August 22, the net holder position of XRP has shown strong positive growth. This shift occurred after a series of outflows in July and early August, when investors were taking profits after XRP reached a multi-year high of $3.66.
The above chart shows that significant XRP accumulation behavior is concentrated in the $2.70-$3 price range, indicating that investors are preparing for a market uptrend rather than choosing to exit the market.
This also explains why these price levels will become important support levels that XRP traders need to closely monitor in the future.
Related: Ripple stablecoin becomes a new withdrawal channel for BlackRock and VanEck tokenized funds
This article does not contain any investment advice or recommendations. Any investment and trading activities involve risks, and readers should conduct their own research before making decisions.
Original article: “Analyst: Ripple (XRP) Price Trend Prepares for ‘Major Shift’ with $4 in Reach”
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