An analyst has explained a dream scenario for XRP based on a Bull Flag that the cryptocurrency has potentially been following on the monthly chart.
A Flag pattern looks like, as its name suggests, a flag on a pole. A consolidation channel with two parallel trendlines forms the “flag” portion, while an initial sharp move represents the “pole.” In a Bull Flag, the pole is charted by a move in the up direction.
Generally, Flags are considered to be continuation patterns, meaning that a breakout tends to happen in the same direction as the preceding trend. In a Bull Flag, as the pole corresponds to a rally, the breakout move is also in the bullish direction.
Now, here is the chart shared by Martinez that shows the Bull Flag that the 1-month price of XRP has possibly been traveling inside for the past year:
As displayed in the above graph, XRP is currently trading inside the consolidation channel of the Bull Flag. Martinez has noted that a dream scenario for the cryptocurrency could now be to retest the $1.90 level, then observe a rally that ends in a bullish breakout.
The $1.90 mark is where the lower level of the flag channel is located. This level usually acts as a support barrier, helping keep the price above it. A rebound at this level could be the spark to a run to $10, according to the analyst.
This target is based on the fact that a Bull Flag breakout is considered to be of the same height as the pole. It now remains to be seen whether XRP will find a break beyond this flag, and if it will follow a path anything like that charted out by the pattern.
“If this bull run keeps going, XRP could offer a solid buying opportunity at $1.90 before rallying to $6,” said the analyst, based on this pattern.
At the time of writing, XRP is trading around $2.53, up 10% over the last 24 hours.
