Katie Stockton, the founder and managing partner of research firm Fairlead Strategies, made a noteworthy statement suggesting that the rise of XRP will eventually benefit Bitcoin. According to Stockton, the continuous rally in Ripple‘s payment-focused altcoin project XRP, which surpassed the key price resistance level, has led to a rise in the price of the largest cryptocurrency.
Ripple’s XRP recorded its best performance since August 2021, rising by up to 90% last week, surpassing even some cryptocurrency exchanges. During the rally, it was observed that the price convincingly moved above a technical analysis tool called the “Ichimoku Cloud” on the weekly chart, confirming the breakout. Katie Stockton stated in a note sent to clients, “We see XRP’s cloud breakout as a good example for Bitcoin.”
The Ichimoku Cloud, a technical analysis tool created by Japanese journalist Goichi Hosoda in the late 1960s, is widely used by investors and analysts to determine support and resistance levels and identify trend changes. The technical analysis tool consists of five lines based on moving averages: Leading Span A, Leading Span B, Conversion Line or Tenkan-Sen (T), Base Line or Kijun-Sen (K), and a lagging closing price line. The difference between Leading Span A and Leading Span B represents the cloud. Price transitions above or below the cloud are commonly accepted as indications of the end of an uptrend or downtrend.
While XRP gains strength above the Ichimoku cloud, Bitcoin continues to move within a narrow range below the cloud resistance (Leading Span A Line). The breakout in the leading altcoin follows a year-long consolidation or base pattern and indicates the possibility of further upside in the future.
Stockton stated in the note to clients, “The price movement on the chart is significant because a year-long consolidation process has been resolved with a major breakout. The medium-term momentum is positive, and there is no sign of exhaustion in the strength of the upward movement surprisingly. It says that this upward price movement will continue, and the next resistance is around $0.92.”
According to the founder of Fairlead Strategies, a similar rise could be seen in BTC if the price surpasses the upper side of the Ichimoku Cloud, which is around $31,900.