XRP, the native cryptocurrency of the Ripple network, has recently caught the attention of traders and analysts due to its potential breakout as it forms a classic “cup and handle” pattern on the daily chart. This technical pattern is often seen as a bullish indicator, signaling a possible rally for XRP if it successfully breaks through key resistance levels.

The Cup and Handle Formation

The cup and handle pattern is a well-known chart formation in technical analysis, characterized by a rounded “cup” followed by a smaller “handle.” This pattern typically signifies a consolidation phase followed by a breakout, which traders often interpret as a buying signal. In the case of XRP, the price action over the last several weeks has formed this pattern, hinting at a potential upward move.

The first leg of the pattern began in late January when XRP peaked at $3.21 on January 28. This was followed by a gradual decline in price, which continued until XRP hit a low of $2.26 on February 7. This downward move established the “cup” part of the pattern, as the price action curved downward and then flattened out. From this point, XRP entered a consolidation phase, with price fluctuations ranging between $2.4 and $2.7.

On February 12, the price began to recover, rising to $2.83 on February 15. This recovery marked the formation of the “handle” in the cup and handle pattern, a smaller downward or sideways movement after the cup. The handle typically represents a brief period of consolidation before a breakout. In this case, XRP has been trading between $2.4 and $2.7 as it prepares for the next potential move.

Resistance and Breakout Target

The key to a breakout in the cup and handle pattern is the resistance level located at the top of the handle. For XRP, this resistance is near the $2.7 mark, a price level that has proven challenging for the cryptocurrency to break through in recent days. A successful breakout above this level could lead to a significant rally.

Thom Sieloff, a well-known analyst in the crypto community, has pointed out that after breaking through the handle’s resistance, XRP could rally by 20% to 30% based on the historical behavior of similar patterns. According to data from xAI’s chatbot Grok, XRP could potentially rise by 25.37% from its breakout point at $2.68, bringing its price to around $3.36.

If this breakout occurs, XRP could retest its previous high of $3.36, which was last seen on January 20. However, at that time, XRP faced significant resistance at this level, which prevented further price movement. This time, a decisive push above $3.36 could result in a more sustained rally.

Market Conditions and Future Outlook

Despite the current consolidation, XRP has shown resilience. At the time of writing, XRP is trading at $2.56, having experienced a 4.41% drop on February 21. However, analysts remain optimistic about the coin’s potential to break out of its current range. Once the consolidation phase ends and the price moves above the $2.7 resistance, XRP could be poised for a strong move upwards.

Market analysts like Polly are even predicting a significant surge, with expectations of a potential price run to $6 within the month if the market sees a recovery push. While these predictions are speculative, they highlight the strong belief in XRP’s potential to break through key resistance levels and continue its upward trajectory.

In conclusion, XRP is currently forming a cup and handle pattern on the daily chart, with a breakout target at around $3.36. While there is no certainty about how the market will unfold, the technical indicators suggest that a bullish move could be on the horizon. Traders and investors will be closely watching how XRP performs in the coming days, especially as it seeks to break above the key resistance level of $2.7. Should this happen, the cryptocurrency may see significant gains, with some analysts forecasting a potential move to $6.