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XRP Forms Important Pattern, Showing Breakout Potential

Fri, 04/22/2022 - 14:47
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Arman Shirinyan
XRP draws an important pattern as the first significant move on the market in months
XRP Forms Important Pattern, Showing Breakout Potential
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XRP finally shows some active movement on the daily chart, according to TradingView. The asset has potentially formed a reversal pattern called the ascending triangle, which is often considered bullish and may hint at a reversal rally.

Since November 2021, XRP remained in the prolonged downtrend, which had resulted in a 43% drop. Since February 2022, XRP made no efforts to break out from the bearish cycle and simply moved in the rangebound.

XRP Chart
Source: TradingView

The formation of the ascending triangle started only in April when the cryptocurrency dropped to $0.69. With the formation of the lower border of the triangle, we can now face a continuous decrease in volatility, which is one of the main signs of a forming pattern.

As for the volume profile, we are in fact seeing a gradual decrease in trading volume, which suggests the correctness and legitimacy of the pattern formation.

How can an ascending triangle play out?

Quite often, ascending or descending triangles appear at the end of any type of rally and suggest a further continuation, which is why this type of pattern is called "continuation patterns."

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Whenever the price of an asset reaches the end of a formed triangle, it breaks out of the direction of its movement. In the case of XRP, in theory, we will see a downward breakout. But it may be too early to panic, since quite often continuation patterns deliver the opposite results and we see a trend reversal.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.