The XRP token, associated with the payment protocol company Ripple, is on the cusp of a major breakout according to technical analysis. Since peaking near $2.9 in early December, XRP has been consolidating in a descending triangle pattern – a formation that often precedes a bullish upturn. This setup, combined with a surge of positive sentiment driven by the perceived crypto-friendly stance of the incoming Trump administration, positions XRP for a potential 40% rally in the near term.
The Descending Triangle: A Springboard for XRP’s Next Leap
Technical analysts have identified a descending triangle pattern on XRP’s price chart since its December highs. This pattern is characterized by a horizontal support line, representing consistent demand at a specific price level, and a descending trendline connecting the lower highs, indicating weakening upward momentum.
While descending triangles can sometimes lead to bearish breakdowns, bullish resolutions of this pattern tend to be more profitable and reliable. According to the CMT Association, a bullish breakout from a descending triangle yields an average gain of 47%.
“In other words, XRP could surge 40% or more if prices top the declining upper trendline, signaling a resumption of the preceding bull run from early November lows near 50 cents,” explains CoinDesk markets analyst Omkar Godbole.
However, Godbole also cautions that a drop below the $2.00 support level would invalidate the bullish setup.
Riding the Wave of Positive Sentiment
XRP’s technical setup is bolstered by a notable uptick in positive sentiment surrounding the token. Data from market sentiment analysis firm Santiment reveals that social media chatter and online engagement related to XRP is markedly more optimistic compared to leading cryptocurrencies Bitcoin and Ethereum.
Much of this optimism stems from the ripple effects of Donald Trump’s presidential election victory. The prospect of a more crypto-friendly regulatory environment under the incoming Trump administration has injected a fresh dose of bullishness into the XRP market.
Since November, XRP has surged over 300%, outpacing the gains of other major cryptocurrencies. The exit of crypto-skeptic SEC chair Gary Gensler and the anticipated shift in regulatory winds are seen as especially favorable for Ripple.
The Trump Effect: Ripple’s Regulatory Renaissance
Ripple CEO Brad Garlinghouse recently celebrated the dawning of what he terms the “Trump bull market,” emphasizing the direct impact of the political sea change on his company’s fortunes. In a tweet, Garlinghouse noted that as optimism surges, 75% of Ripple’s open positions are now US-based – a stark contrast from past hiring trends shaped by an uncertain regulatory climate.
“2025 is here and the Trump bull market is real. For Ripple, this is even more personal after Gensler’s SEC effectively froze our business opportunities here at home for years. The optimism is obvious and very deserved,” Garlinghouse declared.
– Brad Garlinghouse, Ripple CEO
The company reports signing more domestic deals in the final six weeks of 2024 than in the preceding six months – a testament to the “Trump effect” on Ripple’s business landscape.
Ripple President Monica Long also hinted at the potential for an XRP exchange-traded fund (ETF) to “soon” materialize, given the perception of a more accommodative regulatory approach under the new administration.
The Path Ahead: XRP’s Breakout Potential
As technical indicators align with a swell of positive sentiment, XRP appears poised for a significant upside move. A successful breach of the descending trendline resistance could open the gates for the token to challenge its December highs near $3.00 and potentially extend the rally towards new frontiers.
However, investors must remain vigilant for signs of a false breakout or a shift in underlying fundamentals. While the stars seem to be aligning for XRP, the cryptocurrency market’s inherent volatility demands a cautious approach.
As the Trump era ushers in a new chapter for the crypto industry, Ripple and XRP stand at the forefront of the shifting regulatory tide. With technical indicators flashing bullish signals and sentiment riding high, the stage appears set for XRP to unleash its full potential. The coming weeks could prove decisive in determining whether XRP’s triangle resolves into a triumphant breakout or a fleeting false dawn.
