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XRP Seals Path to $0.90 in Recent Pennant Formation

source-logo  thecryptobasic.com 21 November 2023 08:41, UTC

XRP has triggered optimism in its journey to the $0.90 price territory amid the recent formation of a pennant pattern that could indicate an impending uptrend.

For the uninitiated, a pennant is a short-term continuation pattern shaped like a small symmetrical triangle. It forms after a significant price movement, indicating a brief consolidation before the previous trend resumes.

Notably, the direction of the previous trend typically determines the direction of the asset when it breaks out of the consolidation. XRP’s pennant formation has come up on the daily chart following a sustained uptrend over the past month.

XRP had dropped to $0.4878 on Oct. 18 amid a battle with the bears. However, the bulls took control of the scene on Oct. 19, leading to a 6.54% surge that day. This marked the start of an impressive multi-week run. XRP maintained the momentum until Nov. 6, surging to a high of $0.7324. This rally resulted in the formation of the pole.

However, the run slowed upon hitting resistance at this price level. This led to a subsequent price consolidation and mild occasional swings and lows. This pattern has continued since Nov. 7, leading to the formation of the pennant (or flag).

XRP Pennant Formation 1D Chart

It bears mentioning that most pennants form horizontally. Nonetheless, as observed in the daily chart, the recent XRP pennant appears to slant downward mildly.

This is due to the bears exerting more pressure on the asset’s price amid the consolidation phase. However, it does not invalidate the pennant at the current position.

XRP Targets $0.90

Turkish XRP investor and trader Be’lakor called attention to this formation in a post on X. Furthermore, an intriguing disclosure suggested that XRP could be gearing up for a rally to $0.90 once it breaks out of the current consolidation phase.

As earlier highlighted, most pennants result in a breakout to the previous trend. The analyst noted that the $0.90 price target rests on the pivotal Fibonacci level at 0.382. The last time XRP saw this price territory was on July 13 when it soared on the back of Judge Analisa Torres’ ruling.

Nonetheless, Be’lakor believes the bulls need to push for a return to the $0.67 zone within the pennant. XRP is currently changing hands at $0.6101, having relinquished the $0.67 zone to the bears on Nov. 14. A resurgence of selling pressure has impacted the asset’s price more.

Further declines at this point could invalidate the formation of the pennant, resulting in a steeper collapse. To hedge against this, the bulls must break above the $0.6686 resistance at Fib. 0.236.