3 signs suggesting that the XRP price boom may continue in Q4 2022
XRP (XRP) has made sizable gains over the past month as traders continue to show confidence in Ripple’s legal victory against the United States Securities and Exchange Commission (SEC).
For example, the price of XRP gained 25% thirty days after Ripple and the SEC demanded an immediate ruling on whether or not XRP sales violated US securities laws. In comparison, Bitcoin (BTC) and Ether (ETH) fell 4% and 11% respectively over the same period.
Now, a slew of indicators, ranging from channel to technical, suggest that XRP may continue its upward trend into 2023.
XRP price “bull pennant”
Bullish pennants are bullish continuation patterns that form when price consolidates in a triangle-shaped range after a strong upward move. In other words, they resolve after the price breaks out in the direction of its previous uptrend.
On the daily chart, XRP has been moving in a similar technical structure since late September, as shown below. While there, the token also attempted to break above the pennant twice, but was unsuccessful. He is now considering another escape in the coming days.
Theoretically, a bullish pennant break increases the price by as much as the size of the previous uptrend. Therefore, the breakout of XRP’s bullish pennant may push the price towards $0.63 in Q4 2022.
This would mean a price increase of 35%.
Heavy Buildup Detected
The bullish technical setup of XRP receives further clues from the on-chain data, showing that accumulation is underway.
Notably, the average coin age of XRP — the average age of all tokens on the blockchain measured by purchase price — has increased since September, according to data from Santiment. The metric theoretically suggests that XRP users are increasingly holding the tokens.
Additionally, data tracker Whale Alert has detected millions of dollars worth of XRP withdrawals on Bitstamp, Bitso and other crypto exchanges, reducing the supply that can potentially be sold.
Notably, investors have moved a total of $126 million worth of XRP from exchanges to unknown wallets since October 14. In comparison, $78.99 million worth of XRP was deposited in these exchanges.
— Whale Alert (@whale_alert) October 13, 2022
A legal victory for Ripple?
The root of all optimism for XRP over the past few months is Ripple’s potential to win against the SEC.
One of Ripple’s main arguments is a speech by former SEC Director William Hinman at the Yahoo Finance All Markets Summit in 2018. Hinman said Ethereum was not a security despite achieving an initial coin offering (ICO) to raise funds.
Related: Federal Regulators Prepare to Pass Judgment on Ethereum
Ripple’s defense is that the SEC should treat XRP like Ether. And, many believe the argument will guarantee a win for the company. For example, Seeking Alpha Contributor The Digital Trend said:
“News that the court overruled the SEC’s objection to disclosing more documents related to Hinman’s speech in 2018 led to a surge in the price of XRP on September 30; XRP rebounded 12% in twenty-four hours […] These post-hearing rallies might just be a taste of what’s to come if XRP wins the case.
Ripple CEO Brad Garlinghouse expects the deal to close in the first half of 2023. However, he admitted that the outcome of the deal is difficult to predict.
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