XRP Price Analysis Hints Major Support Test Ahead of 500M Token Release

On Monday, the crypto market experienced a notable increase in supply pressure during U.S. trading hours as Bitcoin dropped 2% from $70,000 high to $68,000. This decline spurred a sell-off in the altcoin market, where Ethereum (ETH) and Solana (SOL) both fell by 2%, dropping to $3,800 and $187 respectively. Meanwhile, XRP price analysis recorded a 1.5% decrease, falling to $0.598, which further extends its consolidation pattern within a pennant formation. The upcoming release of XRP tokens into the circulating supply could potentially prolong this correction trend.

XRP Price Analysis: Bull Pennant Signal Impending Breakout

Since mid-July, the XRP price analysis has showcased a sluggish trend resonating within a narrow range of two covering trendlines. The daily chart projects long wick candles with narrow bodies indicating no clear initiation from buyers or sellers.

However, a deeper analysis of the 4-hr chart shows this consolidation as a bull pennant pattern. This continuation pattern hints at the temporary consolidation for XRP before the next leap.

By press time, the XRP price had traded at $0.60, while the market cap had held at $33.5 billion. Despite the bullish narrative, an upcoming release of XRP token by escrow wallet could stall the recovery momentum.

As per the data from XRPScan, the escrow wallet will release 500 Million tokens— worth around $300 Million to circulating supply on August 1. The supply could bolster sellers to breach $0.6 psychological support.

Amid the anticipated pullback, the pennant’s lower trendline and 50 EMA slope from 4 hours may provide suitable support.

Moreover, a potential golden crossover between the 50D and 200D EMA could accelerate the bullish momentum to counter the supply surge.

Breaking above the pennant pattern would indicate that the market has successfully absorbed the newly released XRP tokens, encouraging buyers to target the major resistance trendline established in September 2021. Additionally, a daily RSI reading above 60% suggests that trader sentiment towards XRP remains bullish.

A successful breach above the overhead trendline will signal a major trend reversal and bolster the rally to $0.92, followed by $1.4.

Key Takeaway

The current consolidation in XRP price analysis could be attributed to the delayed settlement in the Ripple Vs SEC court case. Moreover, an upcoming release of XRP tokens by escrow wallet could add additional supply pressure on the asset. Thus, the crypto buyers must watch for a pennant pattern breakout to gain confidence for a potential rally.