After its sharp surge in early-April, the cryptocurrency XRP gave back much of its gains and has been bouncing around in a narrowing trading range. While Bitcoin and Ethereum have rebounded back to their prior highs, XRP continues to struggle as it fights a U.S. Securities and Exchange Commission (SEC) lawsuit charging that the cryptocurrency is an unregulated security. From a technical analysis perspective, it appears that a triangle pattern is forming in XRP, which may indicate that a sharp move is ahead once the cryptocurrency breaks out in one direction or another.
The daily XRP chart shows this pattern forming over the past six months:
The weekly XRP chart shows the recent triangle along with an overhead resistance line that goes back to early-2018:
If XRP can stage a convincing breakout to the upside, that may be a sign that even more gains are ahead. A positive resolution of XRP’s legal battle with the SEC is a potential bullish catalyst that may propel the cryptocurrency higher. A technical breakdown, on the other hand, may indicate more pain ahead. A negative outcome for XRP’s legal battle would likely be a reason why the crypto would experience a technical breakdown. For now, I am waiting to see which direction XRP breaks out.