) has made significant gains over the past month as traders continue to show confidence in Ripple’s potential legal win over the US Securities and Exchange Commission (SEC).
For example, the price of XRP surged 25% thirty days after Ripple and the SEC requested an immediate ruling on whether XRP sales violate US securities laws. For comparison, bitcoin (
) decreased by 4% and 11%, respectively, over the same period.
Daily chart of XRP/USD versus BTC/USD and ETH/USD. Source: Trading View
Now, a range of indicators, from network to technical, suggest that XRP could continue its upward trend until 2023.
XRP Price Bullish Pennant
Bullish pennants are bullish continuation patterns that form when price consolidates in a triangular area after a strong up move. In other words, they resolve after the price breaks the direction of its previous uptrend.
On the daily chart, XRP has been showing a similar technical structure since the end of September as shown below. At the same time, the token also tried twice to break above the pennant, although without success. Now another outbreak is expected in the coming days.
Daily XRP/USD chart with a bullish pennant. Source: Trading View
Theoretically, a breakout of the bullish pennant increases the price by the amount of the previous uptrend. As such, a breakout of the XRP bullish pennant could push the price towards $0.63 in Q4 2022.
This means a price increase of 35%.
Strong accumulation detected
The XRP bullish technical setup is receiving additional signals from the data on the network, showing that accumulation continues.
Notably, the average age of XRP coins — the average age of all tokens on the blockchain as measured by purchase price — has risen since September, according to Santiment data. The calculation theoretically suggests that XRP users are increasingly holding tokens.
Average age of XRP coins (red) and price (green). Source: Mood
In addition, data tracker Whale Alert detected millions of dollars worth of XRP withdrawals through Bitstamp, Bitso and other crypto exchanges, reducing the supply that could potentially be sold.
Notably, since October 14, investors have transferred $126 million worth of XRP from exchanges to unknown wallets. In comparison, $78.99 million worth of XRP was listed on these exchanges.
65,200,000 #XRP ($31,260,398) transferred from #Bitso to unknown wallet https://t.co/uZcv8p7bcD
— Whale Alert (@whale_alert) October 13, 2022
Legal victory for Ripple?
At the heart of all the optimism for XRP in recent months is Ripple’s potential to beat the SEC.
One of the main arguments of Ripple is the speech of former SEC director William Hinman at the Yahoo Finance All Markets summit in 2018. Hinman said that Ethereum is not a security, despite holding an Initial Coin Offering (ICO) to raise funds.
Related: Federal Regulators Prepare to Sue Ethereum
Ripple’s defense is that the SEC should treat XRP like Ethereum. And many believe that this argument guarantees the victory of the company. For example, The Digital Trend’s alpha contributor search says:
“The news that the court rejected the SEC’s objection to the disclosure of several documents related to Hinman’s speech in 2018 led to a spike in the price of XRP on September 30; XRP is up 12% in twenty-four hours […] These post-hearing rallies may just be a sign of what will happen if XRP wins.”