The sixth-largest cryptocurrency, XRP, has seen a significant increase, largely triggered by the excitement of a spot Bitcoin ETF approval and Ripple Labs executing a $285 million share buyback program. The price has risen approximately 10.25% from its weekly low of $0.54 to its current level of $0.6. This positive momentum in XRP could lead the altcoin out of a prolonged consolidation phase and surpass the $0.8 level.
XRP Prepares for a Decisive Breakout
The last six months’ price action on XRP’s chart has been predominantly horizontal, forming peaks and troughs within two converging trend lines. Technically, this price behavior indicates the formation of a symmetrical triangle formation. The fact that both trend lines have been tested several times shows that investors are aware of this chart formation. Additionally, the long-tailed rejection candle (red) burned on January 3rd suggests that buyers view price dips as accumulation opportunities and that the overall trend is upward despite current uncertainties.
According to a recent report by Reuters, Ripple Labs, the company behind the reputable altcoin XRP, has begun a share buyback of $285 million from its initial stakeholders and employees. This buyback is part of a broader $500 million plan that also covers the expenses related to converting restricted stock units into common shares.
This development, along with the bullish sentiment brought by the approval of spot Bitcoin ETFs, has recently driven XRP’s price to rise to $0.6. If the upward momentum continues, the altcoin could gain 6% in value by next week, potentially leading buyers to attempt to cross the general trend line.
To break out of the long-standing consolidation phase, a strong breach of the triangle formation’s resistance trend line is needed. This breakout could intensify buying momentum, leading to an 18% price increase to $0.75 and then to $0.93. According to current data, XRP is trading at $0.5983, just below the $0.60 threshold, down 0.99% in the last 24 hours.
Is XRP Price Poised for Recovery?
Although the current market outlook supports a recovery in XRP’s price, new investors need to wait for the triangle formation to break for confirmation of this recovery. If altcoin investors succumb to supply pressure at the upper trend line, the price could be expected to move horizontally throughout the month. On the other hand, if the price falls below the lower trend line of the triangle formation, a sharp decline could occur.
The Relative Strength Index (RSI) on the daily timeframe is currently at 47, indicating that investors are neutral against a downward trend. The horizontal tendency of the Bollinger Bands (BB) indicator points to a lack of momentum and potentially prolonged horizontal price movement.
