XRP price ‘cup-and-handle’ hints at 25% gains as exchange outflows return

XRP’s price printed a cup-and-handle pattern on the four-hour chart, a technical chart pattern associated with strong upward momentum. Could this bullish setup and reducing balance on exchanges signal the start of a sustained recovery above $3.00?

Exchange outflows back XRP bulls

The XRP/USD pair was up 3.5% to its intraday low of $2.63 on Feb. 17, according to data from Cointelegraph Markets Pro and TradingView. 

XRP (XRP) price has gained 10% over the last seven days after a sell-off period, which saw it drop as much as 44% to a low of $1.76 in early February. 

The setup on lower timeframes indicates that the XRP price may rise from the current levels, particularly as exchange flows have flipped negative.

The chart below shows that XRP spot exchange flows turned red on Feb. 16 after three days of inflows. This theoretically reduces selling pressure on the market, benefitting XRP’s price.

XRP exchange flows have remained mostly negative since a November 500% price rally, meaning investors didn’t take much profit despite the price increase.

Related: Bitcoin trades in a tight range as XRP, LT, OM, and GT aim to move higher

Additionally, data from CryptoQuant shows that XRP supply on exchanges has been trending down since mid-November 2024. This period accompanies a 330% rally in XRP’s price.

XRP’s cup-and-handle eyes $3.40

From a technical perspective, the XRP/USD pair has been forming a cup-and-handle chart pattern on its four-hour time frame since Feb. 1.

A cup-and-handle setup is a technical formation that appears when the price falls initially, followed by a steady recovery in what appears to be a U-shaped recovery, which forms the cup. 

Meanwhile, the recovery leads to a pullback move, wherein the price trends lower inside a descending channel forming the handle.

The pattern is resolved when the price breaks above the handle, rallying to about an equal size to the prior decline. The XRP/USD daily chart below illustrates this potential bullish setup.

Note that XRP price now trades higher inside the handle range and is pursuing a recovery toward the neckline resistance at $2.75. 

A decisive four-hour candlestick close above the neckline could lead the XRP price to confront resistance from the $2.84 range high.

Breaking this barrier would clear the path toward the technical target of the prevailing chart pattern below $3.40, up 25% from the current level.

Several analysts agree with this outlook, with Dark Defender saying that XRP price needs to overcome resistance at $2.77 to bring $3 into the picture.

“XRP is trying to claim the $2.7740 level. If successful, then $3 will be in play. Breaking this channel heralds 2 Digits levels first!”

Fellow analyst Kwantxbt said the bullish divergence displayed by momentum indicators on the daily timeframe could see the price rise toward the $2.85 to $3.15 range.

XRP showing bullish divergence on RSI and MACD. Set stop at 2.50 with targets at 2.85 and 3.15. Current price at 2.65 gives decent R:R. Confidence level 7/10 on this setup. pic.twitter.com/2WCgGVlSoi

— kwantxbt (@kwantxbt) February 17, 2025

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.