Ripple Price Prediction: XRP bulls resilient as technical pattern hints at 18% breakout
- XRP bulls remain resilient despite macroeconomic uncertainty from US tariff policy.
- XRP is edging closer to a potential inverse head-and-shoulders pattern, signaling a potential 18% breakout.
- Risk-on sentiment is building slowly but steadily, reflected in the rise of XRP futures Open Interest to $4.93 billion.
Ripple (XRP) is gradually edging higher, underpinned by steady interest in the token, especially in the derivatives market. A slight increase of over 1% on Tuesday has the token hovering at around $2.28, offering technical signals of a potential 18% breakout above an inverse head-and-shoulders (H&S) pattern.
Market overview: Can XRP extend recovery despite macroeconomic uncertainty?
Global markets are facing renewed uncertainty surrounding the United States (US) tariff policy. With US President Donald Trump’s tariff pause set to end on Wednesday, followed by the implementation of higher tariffs on August 1, volatility could impact risk assets such as XRP.
According to QCP Capital, only one trade deal has been finalized out of the 195 potential trading partners, and 14 new trade letters have been sent out with rates ranging from 25% to 40%; the next few weeks are worth close monitoring.
“Japan and South Korea are staring down 25% tariffs, potentially higher. Markets remain resilient, banking on Trump’s usual delay playbook. But if tariffs go live, expect serious growth headwinds,” QCP Capital states in Tuesday’s market update.
Interest in XRP remains steady, albeit gradually increasing, as reflected by the futures market Open Interest (OI). According to CoinGlass data, OI, which represents the value of all futures and options contracts that have not been settled or closed, has risen to $4.93 billion after falling to $3.53 billion on June 23.
XRP futures Open Interest | Source: CoinGlass
This rise in Open Interest indicates growing investor confidence, with traders betting on a potential price increase for XRP. A subsequent 120% increase in the derivatives market volume to $10 billion signals a surge in market activity, which is often followed by a significant price increase.
At the same time, long and short position liquidations have been almost in parity, around $5 million over the past 24 hours, indicating possible indecision in the market, which may lead to price consolidation in upcoming sessions.
XRP derivatives market data | Source: CoinGlass
Technical outlook: XRP technical structure project 18% breakout
XRP’s price is approaching a potential inverse head-and-shoulders pattern breakout, which could accelerate the cross-border money remittance token by approximately 18% to $2.76.
This is a bullish pattern that signals a potential shift from the downtrend that has been maintained since XRP reached its all-time high of $3.40 in January to an uptrend. Key elements of this pattern include a lower 'head' flanked by two higher 'shoulders' with neckline resistance at $2.33, as shown on the 8-hour chart below.
A breakout above the resistance could extend the uptrend by 18% to $2.76. This target represents the height of the pattern from the neckline to the head and then extrapolates above the breakout point.
Traders would need to monitor the potential change in the volume, with an increase likely to increase the probability of a sustained uptrend.
XRP/USDT 8-hour chart
The upward-pointing Money Flow Index (MFI) indicator, which is slightly above the 50 midline, indicates a potential increase in risk-on sentiment. This tool tracks the money entering or leaving XRP, with a persistent increase signaling the possibility of bullish momentum.
In the event XRP fails to break the pattern’s neckline resistance at $2.33, a consolidation phase could follow, with support provided by the 50-period Exponential Moving Average (EMA), the 100-period EMA, and the 200-period EMA, all situated between $2.20 and $2.22 on the 8-hour chart.
SEC vs Ripple lawsuit FAQs
It depends on the transaction, according to a court ruling released on July 14, 2023: For institutional investors or over-the-counter sales, XRP is a security. For retail investors who bought the token via programmatic sales on exchanges, on-demand liquidity services and other platforms, XRP is not a security.
The United States Securities & Exchange Commission (SEC) accused Ripple and its executives of raising more than $1.3 billion through an unregistered asset offering of the XRP token. While the judge ruled that programmatic sales aren’t considered securities, sales of XRP tokens to institutional investors are indeed investment contracts. In this last case, Ripple did breach the US securities law and had to pay a $125 million civil fine.
The ruling offers a partial win for both Ripple and the SEC, depending on what one looks at. Ripple gets a big win over the fact that programmatic sales aren’t considered securities, and this could bode well for the broader crypto sector as most of the assets eyed by the SEC’s crackdown are handled by decentralized entities that sold their tokens mostly to retail investors via exchange platforms, experts say. Still, the ruling doesn’t help much to answer the key question of what makes a digital asset a security, so it isn’t clear yet if this lawsuit will set precedent for other open cases that affect dozens of digital assets. Topics such as which is the right degree of decentralization to avoid the “security” label or where to draw the line between institutional and programmatic sales persist.
The SEC has stepped up its enforcement actions toward the blockchain and digital assets industry, filing charges against platforms such as Coinbase or Binance for allegedly violating the US Securities law. The SEC claims that the majority of crypto assets are securities and thus subject to strict regulation. While defendants can use parts of Ripple’s ruling in their favor, the SEC can also find reasons in it to keep its current strategy of regulation by enforcement.
Author
John Isige
FXStreet
John Isige is a seasoned cryptocurrency journalist and markets analyst committed to delivering high-quality, actionable insights tailored to traders, investors, and crypto enthusiasts. He enjoys deep dives into emerging Web3 tren
