According to TradingView, XRP is now showing some active action on the daily chart. The asset may have created an ascending triangle reversal pattern, which is frequently considered bullish and may indicate a reverse rally.
Since November 2021, XRP has been on a sustained slump, resulting in a 43 percent loss. Since February 2022, XRP has made no attempt to break out of the bearish cycle and has instead remained rangebound.
The ascending triangle formed only in April, when the cryptocurrency fell below $0.69. With the construction of the triangle’s lower boundary, we can now expect a continual decrease in volatility, which is one of the primary indicators of a forming pattern.
In terms of the volume profile, we are observing a progressive decline in trading activity, indicating that the pattern development is correct and legitimate.
How does an ascending triangle work?
Ascending or descending triangles frequently emerge at the end of any form of rally, implying a further continuation, which is why this type of pattern is known as a “continuation pattern.”
When the price of an asset reaches the end of a formed triangle, it deviates from its previous direction of movement. In the case of XRP, we should expect a downward breakout. However, it may be too soon to fear, because continuation patterns frequently provide the opposite results, indicating a trend reversal.