XRP price could be preparing for a strong bullish breakout this month after forming highly positive chart patterns despite weakness emerging in the XRP Ledger.
Summary
- XRP price could be on the cusp of a bullish breakout this month.
- It has formed numerous bullish chart patterns on the daily chart.
- The surge will happen despite the performance of the XRP Ledger.
Ripple (XRP) token was trading at $2.87 today, Sep. 5, up by a few points from its lowest level this week.
XRP Ledger growth has stalled
Third-party data shows that the XRP Ledger network is not doing well this month. According to DeFi LLama, the network had a total value locked of $96 million, down by 1% in the last 30 days.
The TVL in the network is significantly smaller than that of other recently launched chains. For example, Berachain has 116 decentralized applications and a TVL of nearly $1 billion.
Unichain, which launched in March, has over $650 million in assets and a stablecoin supply of $250 million. These numbers mean that the XRP Ledger has struggled to attract developers on its platform.
The best example of this is in the stablecoin industry, where Ripple Labs launched RLUSD in December last year. RLUSD now has over $709 million in supply, making it one of the fastest-growing coins in the industry.
However, XRP Ledger continues to trail Ethereum (ETH) in terms of RLUSD assets. It has only $85 million in RLUSD supply compared with $624 million that are in Ethereum.
The most important fundamental catalyst that will push the XRP price higher is that the Securities and Exchange Commission will likely approve spot ETFs in October when several deadlines come due. These ETFs are likely to lead to increased demand, as evidenced by the success of Bitcoin and Ethereum funds.
XRP price technical analysis
The daily timeframe chart shows why the Ripple price may be on the cusp of a strong bullish breakout in the near term. It has formed a bullish engulfing pattern, which consists of a large positive candle that fully covers a small bearish one.
The XRP token has remained above the 100-day Exponential Moving Average, which is a bullish sign. It has also formed a falling wedge, which consists of two descending and converging trendlines.
XRP has also formed a cup-and-handle pattern, which often leads to more gains. Therefore, XRP will likely jump and hit the initial resistance at $3.40, the upper side of the cup. It will then jump to the extreme overshoot point at $4.20, up by 50% from the current level.
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