Ripple Price Analysis: Spark token airdrop to push XRP above $0.9?
Daily XRP Price Forecast
- XRP is currently consolidating in a symmetrical triangle pattern.
- The Ripple community is hyped up about the upcoming Spark airdrop.
Ripple (XRP) is in an interesting state right now. The upcoming Spark airdrop has had a mostly bullish effect on the price. Let’s check out some technical analysis to better understand what’s going on behind the scenes.
XRP’s low volatility to result in price explosion?
Looking at the 4-hour XRP chart, it seems like the Bollinger band has started to squeeze. This shows that Ripple is going through a period of low volatility as the buyers and bears look to take control of the market. This usually precedes a period of high volatility.
Image: XRP/USD 4-hour chart
The daily chart further supports this hypothesis of ours. Let’s take a quick look to understand what’s going on.
Image: XRP/USD daily chart
On November 21, the buyers took control of the market and jumped the price from $0.33 to $0.70 on November 24. Since then, the price has been on a downtrend as XRP consolidated itself inside a symmetrical triangle pattern. The symmetrical triangle is a very common chart pattern. It is characterized by two converging trend lines connecting a series of sequential peaks and troughs.
In XRP’s case, the triangle tells us that the price is on the verge of a 40% breakout, either bullish or bearish. If this does end up being a bearish breakthrough, then support levels at the 20-day SMA and 50-day SMA will need to hold firm to prevent a catastrophic downturn. However, we believe that this breakout is most likely going to be positive because of the following reasons:
- The long-term market sentiment is presently highly bullish.
- The MACD in the 4-hour chart has flipped from bearish to bullish.
As such, we can expect XRP to break past the $0.9 level and threaten to trend above $1 for the first time since February 2018. Plus, the positive hype surrounding the Spark airdrop will probably boost XRP’s price as well.
Community hyped about upcoming Spark airdrop
The Spark airdrop is planned for December 12, 2020, and will be distributed by the Ripple-backed Flare Network. As per schedule, 45 billion Spark tokens will be airdropped to all XRP holders of non-custodial wallets. A utility fork in Ripple will generate the tokens, and XRP holders will receive Spark tokens in a 1:1 ratio.
While speaking to CNN, Ripple CEO Brad Garlinghouse justified the hype behind the airdrop and admitted that he is excited with the way the Flare network has been going about things.
“I think XRP holders are deservedly excited about what Flare is doing.....As we’ve said, any time you’re seeing real utility solving a real problem – and I think Flare has carved out an interesting niche and as they move forward with this airdrop of Spark tokens, I’m optimistic for them.”
To add even more intrigue into this mixture, it seems like Coinbase, one of the world's leading crypto exchanges, has expressed interest in supporting the Spark airdrop.
XRP/USD – Key price levels to watch
Right now, potential XRP investors need to watch how the price behaves within the triangle like a hawk. While we fully expect the breakout to be bullish, you cannot ignore the flipside in a market as whimsical as cryptocurrency. If the price breaks down, the investors will hope for the 20-day SMA ($0.55), and 50-day SMA ($0.37) support walls to stay firm. If XRP breaks above the triangle, we can expect the price to break past $0.9.
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