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▲ Photo: XRP
XRP is increasing its potential for a 12% upward breakout amid institutional fund inflows and easing exchange selling pressure. BeInCrypto reported on May 14 (local time) that XRP is moving within a cup-and-handle structure, and if it breaks above $1.51, it could rise to $1.68.
According to BeInCrypto, a cup-and-handle pattern formed on the XRP daily chart from April 17 to May 10. The cup section was created over approximately three weeks, and since May 10, a descending channel has been acting as the handle. The depth of the cup was measured at approximately 12%, and a target price of the same magnitude was suggested upon a neckline breakout.
Volume flow was interpreted as a positive sign. This is because buying pressure flowed in during the declining phase while selling volume decreased in the handle section. However, BeInCrypto pointed out that there have been instances in the past where XRP's cup-and-handle structure did not lead to an actual breakout, emphasizing that confirmation of a breakout is key this time as well. XRP has risen 1.7% over the past seven days.
Institutional fund flows also showed a recovery. According to SoSoValue's weekly data, XRP spot ETF products recorded a net outflow of $35,210 in the first week of May, then turned into a net inflow of $34.21 million for the week ending May 8. Furthermore, as of May 13, the current week has also recorded a net inflow of $31.11 million. BeInCrypto stated that two consecutive weeks of net inflows exceeding $30 million coincided with the XRP price adjustment in the handle section.
Smart money indicators also improved. The Smart Money Index, which tracks the positions of well-informed traders by comparing them with retail investor flows, rebounded from a local low near 2.40 and currently stands at 2.42. BeInCrypto explained that this trend is similar to the movement on April 19, when smart money positions rose first, followed by the XRP price.
Exchange selling pressure significantly decreased in just one day. According to Glassnode's exchange net position change data, XRP flowing into exchanges decreased from 38,088,506 XRP on May 12 to 14,067,566 XRP on May 13. This represents a 63% reduction in XRP inflow to exchanges in a single day, indicating a sharp weakening of selling pressure.
Technical hurdles were concentrated at $1.50 and $1.51. XRP was trading at $1.42 at the time of writing, and the neckline of the cup pattern was gathered around $1.50 and $1.51. BeInCrypto analyzed that a daily close above $1.44 would signal the first handle breakout by overcoming the descending channel resistance, and a convincing daily close above $1.51 would confirm a cup breakout.
In the upward movement, the Fibonacci 0.236 retracement line at $1.44, Fibonacci 0.382 retracement line at $1.47, Fibonacci 0.5 retracement line at $1.49, and Fibonacci 0.618 retracement line at $1.51 were presented as major resistance levels. If a breakout above $1.51 is confirmed, a 12% upward target of $1.68 will open up, which aligns with the Fibonacci 1.618 extension line at $1.67.
On the downside, a daily close below $1.41 was presented as a condition that would weaken the current structure. In this case, the next support level would be $1.38, and a daily close below $1.34 was mentioned as the level that would completely invalidate the cup-and-handle structure. BeInCrypto stated that XRP is currently in a phase where its direction will be determined between the $1.51 neckline and the $1.34 invalidation level.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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