Ripple’s XRP started the week in the green after breaking through a critical level of resistance. As long as this cryptocurrency is above $ 0.65, prices are likely to rise to new year highs.
XRP tries to continue the upward trend
XRP has broken out of an inverted head and shoulder formation development on its 4-hour chart since the end of November 2020. After breaking above the pattern at $ 0.65, the altcoin rose nearly 13% to recently hit a high of $ 0.73.
A further increase in buying pressure around the current price level could push the price of XRP another 55% towards USD 1.13.
This target is determined by inversely measuring the largest area of the head and shoulders and adding this distance upwards from the breakout point.
While the odds seem to favor the bulls, it is important to note that assets where inverse head and shoulders break out tend to retest the neckline or breakout point before moving any further. Such downturns help shake out some of the so-called “weak hands” and offer side investors a chance to re-enter the market.
Regardless of the optimistic outlook, market participants need to be aware that Ripple is a Litigation against the US Securities and Exchange Commission for the illegal sale of an unregistered security. The legal uncertainty surrounding the launch of the distributed ledger suggests that anyone trading XRP should keep tight stop-loss orders to avoid potential risks.
It is worth remembering that the SEC in early June 2019 sued Kik for making an illegal $ 100 million coin offer. The American financial watchdog requested permanent injunction, disgorgation and a penalty that resulted in a 90% collapse in the market value of the KIN token.
Disclosure: At the time of writing, this author owned Bitcoin and Ethereum.