Market analyst EGRAG recently set an XRP target of $0.70 on the back of a possible formation of an inverse head and shoulders (H&S) pattern on the 4-hour timeframe.
In his recent analysis, EGRAG called his audience’s attention to a descending channel that has plagued XRP since Nov. 6. XRP broke above the descending channel during its latest rally on Nov. 23, as it surged above the $0.62 mark.
However, EGRAG emphasized that this breakout could actually be a fakeout, in which case the budding bullish sentiments might be misplaced. Nonetheless, he stressed that if the breakout is not a fakeout, XRP could still drop from its current position to retest the upper trendline of the descending channel.
Interestingly, EGRAG sees this drop to retest the upper trendline as a bullish move. He pointed out that the asset is looking to form the inverse head and shoulders pattern on the 4-hour timeframe.
The Inverse H&S Pattern
The inverse head and shoulders pattern is a bullish reversal formation with three lows – a lower low (head) between two higher lows (shoulders). It typically signals a potential shift from a downtrend to an uptrend, with a breakout above the neckline serving as confirmation of the shift.
Notably, XRP formed the left shoulder when it dropped to a low of $0.5860 on Nov. 17. The asset then formed the head upon the collapse to $0.5700 on Nov. 21. Following a recovery from this collapse, which resulted in a breakout from the descending channel, EGRAG believes another drop is imminent.
This drop would serve two purposes: it would cause XRP to retest the descending channel and it would result in the formation of the right shoulder in the inverse H&S formation.
Once the retest and the right shoulder formation are complete, EGRAG’s chart presents a target of $0.70 for when XRP stages a recovery. However, to recover the $0.70 territory, XRP would need to conquer and break above the elusive resistance point at $0.66.
XRP Eyes $0.70 in Short Term
XRP is currently trading for $0.6199, having recently relinquished the $0.62 territory. The last time XRP saw the $0.70 zone was on Nov. 6. EGRAG noted that XRP would be setting its sights on loftier price targets, including $70 and $700 in the future.
In a separate analysis, the analyst further highlighted XRP’s movements relative to a pre-set trajectory. EGRAG first presented this trajectory on Nov. 14 using a dotted green line.
Notably, the trajectory features a path to the $0.52 territory, and then a subsequent rebound that would see XRP surge above the $0.70 mark.
However, in an update to this report, the analyst confirmed that XRP is now looking to invalidate this pre-set path.
This contrasting move could see XRP skyrocket without dropping below the $0.52 zone. EGRAG noted that this invalidation would be confirmed if XRP register closes above $0.6289. The analyst has drawn a red line at this price point, representing a resistance zone.