XRP price eyes symmetrical triangle breakout as stablecoin supply jumps

XRP price is on the cusp of a breakout from a symmetrical triangle pattern that could potentially lead to sustained gains. 

According to data from crypto.news XRP (XRP) price rose nearly 4% to an intraday high of $1.39 on March 10, Asian time.

The rebound followed after the token fell nearly 8% to $1.34 from its weekly high of $1.46 led by a Bitcoin (BTC) correction amid rising inflation fears on surging oil prices and escalating geopolitical tensions in the Middle East. 

Now, with XRP price recovering, it is drawing closer to a potential breakout from a multi-month symmetrical triangle pattern formed on the daily chart. 

For context, a symmetrical triangle pattern is formed when an asset’s price moves between two converging trendlines that connect a series of sequential peaks and troughs. Typically, a breakout from the upper side of the pattern has been bullish for the asset, while a drop below the lower trendline indicates a bearish trend. 

In XRP’s case, the breakout is occurring from the upper side and hence presents a bullish outlook for the token in the coming sessions. 

At press time, momentum indicators like the MACD and RSI are also suggesting that a strong recovery is underway. The MACD line was pointed upwards, while the RSI had formed a bullish divergence with XRP’s recent price action, suggesting that selling pressure is cooling off. 

For now, the 23.6% Fibonacci retracement level at $1.42 stands as the key resistance zone that traders would be keeping an eye on.

Breaking out from this level could potentially trigger a rally to $2.06, a target calculated by adding the height of the symmetrical triangle pattern formed to the price point at which the breakout would be confirmed. The target lies nearly 50% from the current price of $1.38. 

A major catalyst that could support its gains is the growing stablecoin supply on the XRPL network. Data from DeFiLama show that the total stablecoin supply on the network has gone up 2.5% over the past 7 days to $426 million. 

A greater supply means more liquidity and trading activity on the network, and investors often see such growth as a sign of increasing demand for the underlying ecosystem. 

However, some caution is warranted as institutional demand for the altcoin has slowed. Notably, U.S. spot XRP ETFs recorded $22 million in net outflows over the past two weeks, breaking a four-week inflow streak.