Cup-and-Handle Formation Suggests Breakout Above $3.00
XRP’s price has recently formed a classic cup-and-handle pattern, a bullish continuation structure that signals potential gains of up to 25%. This technical setup, combined with declining exchange balances, suggests a sustained price recovery above the $3.00 mark.
Exchange Outflows Boost Bullish Sentiment
The XRP/USD pair rose 3.5% to an intraday low of $2.63 on 17 February, according to TradingView data. Over the past week, XRP has gained 10%, rebounding from a steep 44% decline in early February that saw the price drop to $1.76.
XRP spot inflow/outflow. Source: CoinGlass
Lower timeframe analysis indicates that XRP could extend its rally, particularly as exchange outflows return. On 16 February, XRP spot exchange flows turned negative after three consecutive days of inflows, theoretically reducing selling pressure and supporting further price appreciation.
Data from CryptoQuant also reveals that XRP supply on exchanges has been steadily declining since mid-November 2024. This period coincided with a 330% price rally, suggesting that investors held onto their assets rather than taking profits despite the significant price increase.
Technical Outlook: XRP Eyes $3.40 Target
From a technical perspective, XRP has been forming a cup-and-handle pattern on the four-hour chart since 1 February. This pattern consists of an initial price decline followed by a U-shaped recovery, forming the “cup,” and a subsequent downward movement within a descending channel, forming the “handle.”
The bullish structure is confirmed when the price breaks above the handle, potentially leading to a rally equal to the prior decline. The XRP/USD daily chart reflects this setup, indicating a possible breakout.
XRP supply on exchanges. Source: CryptoQuant
Currently, XRP is trading higher within the handle range and is aiming for a recovery toward the neckline resistance at $2.75. A decisive four-hour candlestick close above this level could propel the price toward the next resistance at $2.84.
Breaking this barrier would pave the way for a rise towards the technical target of $3.40, marking a 25% increase from current levels.
Analysts Predict Further Upside
Market analysts share an optimistic outlook for XRP’s price trajectory. Crypto analyst Dark Defender believes that reclaiming the $2.77 level could set the stage for a move towards $3.00.
“XRP is trying to claim the $2.7740 level. If successful, then $3 will be in play. Breaking this channel heralds two-digit levels first!” Dark Defender stated.
Similarly, analyst Kwantxbt highlighted the bullish divergence in momentum indicators on the daily timeframe, suggesting that XRP’s price could climb into the $2.85 to $3.15 range.
With key technical indicators aligning and exchange outflows reducing selling pressure, XRP appears poised for further gains in the coming weeks.
