Ripple Price Analysis Confirms An XRP/USD Pennant Breakout – Bulls Taking Charge?

Ripple Price Analysis

August 27th saw the Ripple’s native asset XRP, make a big bullish move, breaking out from a bullish pennant pattern. The crypto asset has largely been treading lower this year, except for two upswings made during mid-February and late-April. After the record rise seen through 2017 and up to January 5th this year, the XRP/USD has been stuck in a correction phase for most part of the year until now. However, Ripple price analysis reveals a recent bullish technical pattern breakout for the XRP/USD pair, hinting at a reversal.

Pennant Breakout Confirming a Bullish Trend

In technical analysis, a pennant (or flag) pattern is formed when the price rallies sharply, then moves sideways or slightly to the downside. This sideways movement typically takes the form of a small triangle (pennant) or rectangle (flag). The price rise preceding the flag or pennant is called the flag pole. In the chart above, we can see that the XRP/USD made a pennant pattern. The pattern was formed over August 17-August 27, after which the XRP managed to breakout to confirm a bullish trend.

Further, the RSI (relative strength index) index movement and current level (around 50) indicates strength in the current market momentum. Moreover, buying volume (as indicated by green bars in chart above) too, appears to be driven by the bulls.

Fundamental factors supporting a bullish XRP

On a fundamental level, the inherently decentralized nature of the XRP Ledger is what should drive XRP higher, as propounded by Ripple CTO, David Schwartz in a release. From what David highlighted, cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) are more centralized and concentrated than the XRP.  This exposes them to a greater amount of concentration risk vis-à-vis Ripple’s native asset.

“As of today, four mining groups currently control 58% of the Bitcoin network and three miners account for 57% of Ethereum’s daily capacity. Further, 80% of the mining on the Bitcoin blockchain is centralized in China, despite the country’s ban on digital assets. This puts it at greater risk of being manipulated by a single, sovereign government.”

Moreover, “Unlike Bitcoin and Ethereum — where one miner could have 51% of the hashing power — each Ripple validator only has one vote in support of an exchange or ordering a transaction.” So, Ripple’s validators do not wield meaningful power over the XRP Ledger.

Image Credit: Deposit Photos

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